A revision of European company law means that establishing and setting up a business could become cheaper and easier.
An new set of rules to facilitate the digital operation of business procedures under new European company law has been provisionally agreed by EU co-legislators. The new rules aim to save businesses time and money, while increasing safeguards against fraud and abusive behaviour through online identity checks.
What are the details of the new European company law rules?
- Companies are able to register limited liability companies, set up new branches and file documents for companies and their branches, to the business register fully online;
- National model templates and information on national requirements are to be made available online and, in a language broadly understood by the majority of cross-border users;
- Rules on fees for online formalities are to be transparent and applied in a non-discriminatory manner;
- Fees charged for the online registration of companies do not exceed the overall costs incurred by the member state concerned;
- A ‘once-only’ principle, whereby a company would only need to submit the same information to public authorities once;
- Documents submitted by companies are stored and exchanged by national registers in machine-readable and searchable formats; and
- More information about companies is made available to all interested parties free of charge in the business registers.
The reasons behind the digital shift
The new European company law rules have been predicated to cut registration time down by 50% and be three times cheaper, with firms estimated to save between €42 and €84 million per year. In 2017, European Parliament called on the Commission to consider a resolution on the EU e-Government action plan; to further promote digital solutions for formalities throughout a company’s lifecycle.
Following on from this, the Commission proposed to revise and update European company law and in April 2018, a package of proposals on digital tools and processes in company law was introduced.