The EU has decided to revise company law with the aim of ensuring it remains fit for purpose in the digital age.
The Council of the European Union has reached a provisional agreement with the European Parliament's representatives on a draft directive with the aim of facilitating and promoting the use of online solutions in a company's contacts with public authorities throughout its lifecycle.
The new rules aim at ensuring that:
At the same time, the draft Directive sets out the necessary safeguards against fraud and abuse in online procedures, including control of the identity and legal capacity of persons setting up the company and the possibility of requiring physical presence before a competent authority. It maintains the involvement of notaries or lawyers in company law procedures as long as these procedures can be completed fully online. It also foresees an exchange of information between member states on disqualified directors in order to prevent fraudulent behaviour.
The Directive does not harmonise substantive requirements for setting up companies or doing business across the EU.
The provisionally agreed text will now have to be approved by the relevant bodies of the two institutions. It will then be formally adopted after the usual legal/linguistic scrutiny.
Whether it will apply in the UK will depend on whether transitional arrangements for the UK’s exit from the EU come into force, and for how long, but it may be of interest for companies with subsidiaries in EU or EEA member states.