Corporate Services in the Digital Era

The European Parliament has recently published a proposal for the amending of Directives 2009/102/EC and 2017/1132/EU with the aim of further expanding and upgrading the use of digital tools and process in company law.

Aligned with the digitalization objectives set out by the European Union, specifically in the Commission Communication 2030 Digital Compass: the European way for the Digital Decade, the purpose of this proposal is to address the impact of technological advancements and digitalization on the operations of business registers, as well as the interactions between business registers, companies, and public authorities regarding company law matters. The COVID-19 pandemic has demonstrated the significant role of digital tools in ensuring the continuity of companies’ interactions with business registers and authorities. The proposal also aims to introduce company law measures to tackle the barriers that small and medium-sized enterprises (SMEs) face in expanding across borders within the single market. This is in line with the Commission Communications Updating the 2020 New Industrial Strategy and SME Strategy for a sustainable and digital Europe.

This proposal seeks to create a more integrated and digitalized single market, reducing the administrative burden on companies by an estimated EUR 437 million per year. Additionally, it aims to limit new burdens by leveraging national business registers and interconnecting them through the Business Registers Interconnection System (BRIS) while considering the variations in national systems and legal traditions.

Specifically, this proposal aims to enhance transparency on companies in the single market using digital tools such as BRIS, increase the reliability of company data, and establish trust between Member States’ registers and authorities. It also aims to eliminate and decrease formalities related to the use of company information in cross-border situations and streamline the process of setting up subsidiaries and branches in other Member States by adopting the “once-only principle.” This principle means that companies will not be required to submit the same information to business registers more than once. By doing so, this proposal aims to reduce the overall administrative burden for companies and other stakeholders involved in cross-border situations and make it easier for SMEs to expand within the EU.

In addition to the ‘once-only principle’ the proposal aims to introduce an EU Company Certificate which will contain basic information about companies, which will be accessible in all EU languages, at no extra cost. Furthermore, there shall be the development of a multi-lingual standard template for a digital EU power of attorney which will authorise a person to represent a company in another EU member state. Finally, there is also plans for the elimination of formalities such as the need for an apostilled or certified translations of company documents.