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Cross-Border Issues and Digital Registration of Companies in the European Union

The European Commission has recently recommended to extend the so-called Single Digital Gateway - the single digital entry point to high quality information and online administrative procedures for companies in the EU - by releasing the proposal for the Directive 2017/1132 as a part of the EU Company Law Upgraded Package. This may bring along changes in how companies operate on the territory of the European Union.

This proposal covers the use of digital tools and processes in company law, as well as provides digital solutions and efficient rules for cross border operations of companies. In comparison to the Commission’s Single Digital Gateway, this proposal provides more specifics on the procedures for establishing and registering limited liability companies and branches.

Some of the key elements found in the proposal deal with the handling of online registration, multiple submission of the information by companies, and online access to company information held in the business register. Overall, the proposal looks to harmonize these processes throughout the Member States, while reducing costs to entrepreneurs, increasing access to information, and eliminating the need for physical presence in the registration of a business unless there is suspicion of fraud. The new proposals will reduce costs for starting and maintaining business, specifically digitally based ones, as well as reduce the time and confusion that comes with having to register the same company information in every Member State where company operates.

Companies are increasing the use of digital tools in the management and execution of their business, but they still need to interact with public authorities which is not always possible through online means. Currently, there are significant differences between Member States when it comes to accessibility and availability of online tools for companies in the area of company law. Additionally, third parties such as investors and citizens who need to access company information in the registers are only guaranteed a limited amount of free information, after which they must pay a fee causing the access to information to vary across the EU.

To solve these issues, the proposal aims to complement the existing rules on EU company law in accordance with Directive (EU)2017/1132 by building on digital elements already in place such as the Business Registers Interconnection System (BRIS), the Commission Implementing Regulation (EU)2015/884, and the Treaty on the Functioning of the European Union (TFEU). Without proper EU level action, only non-harmonized national solutions would occur, causing established companies and entrepreneurs alike to face unnecessary barriers to their business.

The Commission will assist Member States in transposing the proposed measures as well as will monitor the implementation of such measure by cooperating closely with national authorities. Additionally, the Commission will provide assistance and guidance to Member States in implementation.

Deadlines for Public Consultation

The EC proposals are now open for comments. The feedback period of the proposals runs 26 April 2018 - 26 June 2018.



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