Is EU company law, the cornerstone of the internal market, still suited to the needs of businesses, employees, shareholders and changing economic conditions? This is the issue the European Commission asks stakeholders to tackle in an online consultation, launched on 20 February, which will run until 14 May. Around 20 questions are raised in connection with the general objectives of company law and more specific initiatives to be considered in the future (see Europolitics 4364).

«Better legislation means that companies will be able to develop more easily in the EU for the good of their shareholders and customers,» commented Internal Market Commissioner Michel Barnier. «The landscape for company law is changing and we need to think about how best to adapt our regulatory framework.» The consultation begins with questions related to the general orientation of EU company law and its scope, with a view to assessing where needs lie and whether any changes should be set in stone with a legislative text or put in practice through more exchange of best practice between member states.

SINGLE CORPUS?

Next come questions on the coherence of the existing corpus of directives, some of which are old, on the need to revise texts to give them the same architecture or add missing definitions (eg ‘shareholder’). All these points are meant to put to the test one of Barnier’s favourite ideas, namely the codification and modernisation of existing directives.

Stakeholders are also asked to give their views on existing legal forms of companies – the European economic interest groups, the European company and the European cooperative society – and on the advisability of considering other forms.

The sensitive issue of the transfer of registered offices in the EU, source of an ongoing controversy, is the subject of a specific chapter meant to determine how to facilitate such transfers. Is there a need for a new directive, as recommended by Parliament, or should rules on cross-border mergers be revised? What about divisions, on which there is no EU legislation?

The consultation also addresses the question of groups of companies – the subject of a twice-abandoned draft directive – seeking stakeholders’ views on how to improve knowledge of group structure, which would be useful to investors and stakeholders. It also discusses Directive 77/91/EEC on safeguards required of public limited liability companies, asking about its use and raising questions related to minimum capital requirements, balance sheets and insolvency.

“Better legislation means that companies will be able to develop more easily in the EU for the good of their shareholders and customers”