Update | The EU proposes a directive on company law digitalisation

On March 29, 2023, the European Commission proposed to adopt a new directive on the use of digital tools and processes in EU company law (CLICK HERE to read the full text of the directive proposal). This decision arises from the need to upgrade the EU company law, in order to face the new economic and social challenges of an increasingly digital world.

The aim of this proposal is to simplify transactions between companies and to promote business transparency, reducing the administrative burdens. The new features to be introduced are:

• the application of the “once-only (una tantum) principle”, which implies that companies should submit information only once, and not every time they set up a branch or a company in another Member State. For this purpose, the exchange of the relevant companies’ information can take place through the Business Registers Interconnection System (BRIS);
• an EU Company Certificate which includes a basic set of companies’ information, available free of charge in all EU languages and recognised in all EU Member States;
• a multi-lingual standard model for a digital EU power of attorney, which authorizes a person to represent the company in another Member State;
• the removal of some traditional formalities i.e. the apostille or certified translations for corporate documents.

These new rules lead to make publicly available at EU level the most important companies’ information, allowing a search through BRIS, the beneficial ownership register and the insolvency register. Therefore, in order to make sure that the companies’ data included in these registers is accurate, reliable and up to date, it will be necessary to verify in advance the data to be entered into these registers.

This proposal represents a second step on the digitalisation of company law and it is complementary to the Digitalisation Directive (EU) 2019/1151, which introduced the possibility to set up companies and to carry out company law procedures online.

The European Parliament and the Council will now discuss this proposal. If the European Union decided to adopt this new directive, each EU Member State will have two years to transpose it into national legislation.