The European Commission has proposed new rules making it easier for companies to expand the use of digital tools such as the Business Registers Interconnection System (BRIS), aiming to increase business transparency and trust by making more information about companies, such as partnerships and groups of companies, publicly available at EU level. This should improve the reliability of company data and foster trust between member states’ registers and authorities, thus creating more connected public authorities. It also aims to reduce formalities in relation to the use of company information in cross-border situations.
The move comes in recognition that a predictable EU-wide legal framework is conducive to growth and will help businesses face new economic and social challenges in an increasingly digital world. The Commission estimates that reducing the administrative burden for cross-border businesses will save €437m a year.
The proposed rules include the use of a ‘once-only principle’, making the setting up of subsidiaries and branches in other member states less time-consuming and more cost-effective as companies would not be asked to submit the same information to the business registers more than once.
Meanwhile, an EU Company Certificate, containing a basic set of information about companies, will be available free of charge in all EU languages and a multilingual standard model for a digital EU power of attorney will authorise a person to represent the company in another member state. The Commission also proposes removing formalities such as the need for an apostille (an official government-issued certificate added to documents so they will be recognised when presented in another country) or certified translations for company documents.
The proposals will contribute to further digitalisation of the single market and help companies, in particular SMEs, to do business in the EU. These proposals will apply to around 16 million limited liability companies and two million partnerships in the EU.
Didier Reynders, the European Commissioner for Justice, said the proposals would support companies to do business quickly and effectively in a competitive global market, while reaping the benefits of the EU Internal Market: “It will greatly simplify cross-border procedures for companies, business registers and authorities. In particular, the EU Company Certificate will provide EU companies with simple and reliable means to provide essential information about their company to authorities and stakeholders across the EU.
“It will be available in all EU languages and recognised in all member states,” he added. “Removing the need for the apostille will also lift an important barrier for companies.”
Improving transparency and trust in cross-border business
The proposals update existing EU rules for companies (Directive (EU) 2017/1132) to take into account digital developments and new challenges, and to stimulate growth and competitiveness in the single market.
The rules will make searches for information about companies in the EU easier by allowing a search through BRIS and, at the same time, through two other EU systems interconnecting national beneficial ownership registers and insolvency registers.
It will also ensure that company data in business registers is accurate, reliable and up to date, for example by providing for checks of company information before it is entered in business registers in all member states.
The proposals will now be discussed by the European Parliament and the Council. Once adopted, member states will have two years to transpose the Directive into national law.
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