Brussels: Europe and the Arabs
The Council of the European Union adopted its position (negotiating mandate) on the amended Directive to further expand and modernize the use of digital tools and processes in company law. The new rules will make company data more readily available, enhance trust and transparency in companies across member states, create more connected public administrations and reduce red tape for companies and other stakeholders in cross-border situations. In doing so, it will contribute to creating a more integrated and digitized unified market for companies.
According to a European statement issued in Brussels last night, "The mandate agreed upon Wednesday gives the Council presidency a framework to begin negotiations with the European Parliament."
The statement quoted Paul Van Tijlt, Belgian Deputy Prime Minister and Minister of Justice, who holds the current rotating presidency of the Union, as saying, “One way to increase competitiveness in our companies is to accelerate the digital transformation in the application of company law. Digitization will make administrative processes cheaper, faster, and less burdensome.”

Company information is simpler and more digital
The Commission's proposal will provide more information to the public about companies at EU level through the Business Registers Interconnection System (BRIS). The Directive aims to ensure that company data in business records is accurate, reliable and up-to-date.

The new rules are also intended to reduce red tape when companies use company information from business records in cross-border situations. For example, the proposal removes formalities such as the need to legalize company documents and encourages the use of the “just once principle” when companies establish subsidiaries and branches in another Member State. It also offers a multilingual EU company certificate for use in cross-border situations.

Council mandate
The Council's negotiating mandate shares the main objectives of the proposed Directive but introduces some improvements to simplify some procedures and reduce the administrative burden on companies and national authorities.

For example, it establishes a “one-time-only” principle for exchanging and accessing information when a company creates cross-border subsidiaries or branches. To reduce the administrative burden on business and corporate records, information on corporate groups will no longer be required. The Council's mandate also protects different national traditions regarding the registration of personal data in the EU company certificate.

Regarding the EU Digital Power of Attorney, the Council's position introduces some technical adaptations that increase its ease of use, by reducing the risk of developing parallel, non-interoperable systems across the Union.

Finally, the settlement text provides for an additional six months in the transition period to help companies adapt to the new requirements.

It is noteworthy that on 29 March 2023, the Commission (Commissioner for Justice, Didier Reynders) published a proposal for guidance to expand and modernize the use of digital tools and processes in corporate law.

This proposal will contribute to achieving the objectives set out in the following communications: “Digital Compass 2030 and Digitization of Justice in the EU”, “Updating the New Industrial Strategy 2020”, and “SME Strategy for a Sustainable and Digital Europe”.

The guidance also updates and complements the 2019 guidance on the use of digital tools and processes in company law