By Segismundo Alvarez
The much awaited Company Law Package was finally published by the European Commission on April 25. It aims to establish “simpler and less burdensome rules for companies” regarding incorporation and cross border transactions and consists of two proposals.
Proposal 2018/0113 intends to promote the use of digital tools and procedures in company law. Member States will need to allow a fully online procedure for the registration of new companies and of branches of other companies, that permits the incorporation without the physical presence of the members before any public authority. To avoid fraud and abuse the proposal “sets safeguards against fraud and abuse such as mandatory identification control, rules on disqualified directors and a possibility for Member States to require the involvement of a person or body in the process, such as notaries or lawyers”. The proposal also establishes the need to offer free access to the most relevant information of companies in the Companies Registers. This proposal will require important changes in national legislations and its implementation will be a technological challenge for the Member States that want to preserve the present level of control in the incorporation of companies. The question of online identification will undoubtedly be of special interest and complexity.
This first proposal certainly deserves more detailed examination. However, to keep this post short, I will concentrate here on the second proposal (2018/0114) regarding cross-border conversions, mergers and divisions. Continue reading