MEPs back new rules on better information sharing about companies in the EU

New rules should save companies 437 million euro every year

Information entered into one national register to be shared across the EU via registers' interconnection

Establishes unified multilingual EU Company Certificate and digital EU power of attorney

Draft legislation should move EU closer to digitalisation of public services while eliminating administrative burden for companies.

With 22 votes in favour, the Legal Affairs Committee approved unanimously draft rules improving the availability and reliability of company information in business registers and its use in cross-border situations.

Digitalisation cutting costs and red tape

The aim of draft rules is to simplify cross-border expansion of companies, including setting up subsidiaries and branches in other EU countries, by ensuring that national registers have reliable information about companies and that it can be easily accessible across the EU via business registers' interconnection. These rules should benefit small and medium-sized enterprises, in particular. Reduced administrative burden should save companies 437 million euro annually, thus outweighing potential one-off costs for filling information to the register. Besides, new burdens should be prevented by building on transparency and reliability of national business registers and their interconnection through the Business Registers Interconnection System (BRIS). BRIS should further be interconnected with the beneficial ownership registers interconnection system (BORIS) and the insolvency registers interconnection (IRI) system.

Once-only principle and EU Company Certificate

Proposal includes the ‘once-only principle’ according to which companies would not be asked to submit the same information to the business registers more than once. MEPs also want cooperatives to fill their information into the register. They further ensured relief of administrative burden by making sure that in case of no change, companies will not have to update or confirm register information every year. Draft rules introduce the EU Company Certificate and a digital EU power of attorney and abolish formalities such as the apostille, which was so far required as authenticity stamp on some official company documents in cross-border context. MEPs want that the EU Company Certificate be provided free of charge and a digital EU power of attorney should be signed by qualified electronic signatures. Important register content such as procedures with effect for the internal market should be checked by public gatekeepers and MEPs insist that electronically transmitted register documents should have the same legal effect as those issued physically by registers.

Quote

Following the vote, rapporteur Emil Radev (EPP, BG) said: „It is important for us to reduce the bureaucratic burden for European companies through digitization and ensure more transparency and trust in the business environment. With the new legislation, we will increase the security and reliability of information in the business registers in member states by providing for preventive control by administrative authorities, courts and notaries in the EU.“

Next steps

In case negotiating mandate is supported by the plenary at its upcoming meeting, the Parliament will be ready to start negotiations with member states on the final text of the legislation.

Background

Commission submitted its proposal for amended directive in March 2023. It aims to enhance transparency and trust in the business environment, achieve more digitalised and connected cross-border public services thus leading to a more integrated and digitalised single market.