First pageNewsDigitalisation of company law. quicker procedures for eu companies

Digitalisation of Company Law. Quicker Procedures for EU companies

On July 11th, 2019, Directive (EU) 2019/1151 (“Directive 2019/1151”) of the European Parliament and of the Council of 20 June 2019, amending Directive (EU) 2017/1132 regarding the use of digital tools and processes in company law was published with the Official Journal of the European Union.

Directive 2019/1151 creates a further step towards the digitalisation and modernisation of companies law across the EU, by aiming to promote the use of digital tools and processes in the context of companies law. Encouraging innovation in business, Directive 2019/1151 promotes digital registration and incorporation of new companies and their respective branches in Member States.

Directive 2019/1151 steps further in line with technological advancements, by diminishing the need for physically having to show up before a relevant authority, limiting such cases to only a handful of exceptions to the rule, i.e. where public interests might be at stake.

Directive 2019/1151 provides additional guidelines on a number of topics including online formation of companies, online registration of branches, online document and information filing by companies and their respective branches. Member States are required to provide free of charge information regarding company formation and registration of branches, and provide standardized forms available for full online registration.

Directive 2019/1151 also sets forth that using the interconnected system of registers, the Member State where a company is incorporated shall notify the Member State where the company branch is registered, of any changes made to the company’s record which fall under the categories mentioned within the Directive.

Member states may refuse the appointment of an individual as a company director, in cases such as those were the individual in question has been disqualified from acting as a director in another member state. This shows that it is possible for one Member State to reply to another Member State’s request for relevant information relating to the disqualification of directors.

Concerning payment methods, Directive 2019/1151 stipulates that when the online procedures require a payment, Member States shall ensure the possibility of performing cross-border payments, permitting the identification of the person performing the payment.

Furthermore, by promoting the digitalisation of company law, the same Directive acts as an important check for the legitimacy and legality of cross-border operations such as the conversions, divisions and mergers of limited liability companies established in a Member State, thus limiting abuses and protecting the legitimate interests of workers, shareholders and creditors.

Under the Directive 2019/1151, the use of such digital tools and processes represents one of the prerequisites for the effective functioning, modernisation and administrative streamlining of a competitive Internal Market and for ensuring the reliability and transparency of companies.

Directive 2019/1151 was published with the Official Journal of the European Union on July, 11th, 2019 and came into force on July, 31st, 2019. The Directive has to be implemented at national level by August 1st, 2021.

© Copyright Stratulat-Albulescu.ro 2020. All rights reserved.