European Union: Proposal For New EU Directive On Company Law Digitalisation

On 29 March 2023 the European Commission published a proposal for a new directive aimed at expanding and upgrading the use of company law digital tools and processes within the EU. Several significant changes are proposed, which include:

(a) the creation of an EU Company Certificate containing common information for EU limited liability companies and partnerships, which will be available in all official EU languages;

(b) the implementation of a "once-only principle", pursuant to which companies establishing a branch or a company in a Member State will no longer be required to re-submit corporate information already registered in the national register of another Member State;

(c) the connection of the existing EU Business Registers Interconnection System (BRIS) to the national beneficial owner registers and insolvency registers of Member States;

(d) the increase of the information required to be registered in national corporate registers and made available through BRIS, and the implementation of additional safeguards to ensure that such information remains accurate, reliable and up-to-date at all times;

(e) the implementation of a standard model digital EU Power of Attorney for the authorisation of a person to represent a company in another Member State, which will be available in all official EU languages and will be registrable in national corporate registers, together with all amendments and revocations thereof; and

(f) the elimination of the need for legalisation by apostille, certification or translation regarding certain corporate documents.

The proposed changes are intended to facilitate cross-border corporate activities and expansion within the EU and to improve transparency, with a view to aiding in the fight against fraud and abuse.

The proposed directive is anticipated to be adopted in 2024, transposed by Member States by 2027 and fully implemented by 2028.

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