The EU company law package - a BusinessEurope position paper
BUSINESSEUROPE welcomes the EU Company Law Package which aims to facilitate companies’ use of digital technologies, whether in the creation of a new company or in updating business-relevant information in public registries. The new rules also intend to make it easier to perform essential cross-border operations such as mergers, divisions and conversions.
Access to digital tools to perform those key company operations is essential for entrepreneurs to move faster in a highly competitive and increasingly connected business environment.
The possibility of creating a company digitally, registering branches digitally or the “do it once only” principle have a clear added value.
The proposals need to remain focused on the right objectives (and feasible ones from a company law perspective) which are to ensure an effective right - clearly recognised by the EU treaties - of establishment in the EU as well as to bring company law into the 21st-century. These objectives should be met without prejudice to the rights of company stakeholders (shareholders, creditors and workers). However, company law is not the right tool to pursue objectives such as fight against tax evasion or avoidance and social dumping, which are already dealt with via more appropriate tools at EU and national level.
The proposed (new) procedures for conversions and divisions still seem quite complex and filled with avoidable duplications. Conversions and divisions are treated the same whereas they differ: in case of conversions there is a universal transfer of assets. They also tend to place the company in a situation where by default it has to prove that it is not doing anything wrong with the cross-border operation. This is an unacceptable departure from the law and from the practice.
In its recent Polpud ruling the Court of Justice of the European Union strongly reaffirmed the freedom of establishment in the treaties. In the spirit of this ruling the objective of this proposal should be to make available procedures to perform cross-border mergers, divisions or conversions which are simple, clear and effective.
Protection for company stakeholders is necessary but it needs to remain reasonable and proportionate. It cannot become a de facto unsurpassable hurdle preventing the honest entrepreneur from expanding his business beyond borders.
- Up until now there are only 17 Member States that provide a fully online procedure for registering companies.
- Online registration takes on average half of the time and can be up to 3 times cheaper than traditional paper-based formats.
- Today companies wishing to move to another Member State risk having to dissolve first.
- Savings for online registration and filing under the new rules are estimated to be €42 – €84 million per year for EU companies.
- The cross-border merger directive is a success story – 172 % more cross-border mergers since its adoption.