What changed between the draft committee report and the plenary report

DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION

7 unchanged paragraphs

on the proposal for a directive of the European Parliament and of the Council amending Directives 2009/102/EC and (EU) 2017/1132 as regards further expanding and upgrading the use of digital tools and processes in company law

(COM(2023)0177 – C90121/2023 – 2023/0089(COD))

(Ordinary legislative procedure: first reading)

The European Parliament,

– having regard to the Commission proposal to Parliament and the Council (COM(2023)0177),

– having regard to Article 294(2), Article 50(1) and (2)(g) and Article 114 of the Treaty on the Functioning of the European Union, pursuant to which the Commission submitted the proposal to Parliament (C90121/2023),

– having regard to Article 294(3) of the Treaty on the Functioning of the European Union,

Added:– having regard to the opinion of the European Economic and Social Committee of 14 June 2023,

– having regard to Rule 59 of its Rules of Procedure,

Changed:– having regard to the report of the Committee on Legal Affairs (A90000/2023),(A9-0394/2023),

1. Adopts its position at first reading hereinafter set out;

2. Calls on the Commission to refer the matter to Parliament again if it replaces, substantially amends or intends to substantially amend its proposal;

3. Instructs its President to forward its position to the Council, the Commission and the national parliaments.

Change 1

Changed:Recital 9: (9) A preventive administrative, judicial or notarial control,control or any combination thereof, respecting Member States traditions, should be ensured in all Member States in order to ensure reliability of cross-border company data. Member States should therefore provide for public preventive control through courts, administrative authorities or notaries.notaries in accordance with their national legal systems. A legality check of the company’s instrument of constitution, the company statutes if contained in a separate instrument, and of any amendment of such instruments and statutes, should be carried out, given that these are the most important documents concerning the company.

Recital 9 a (new): (9a) The legality of company law transactions, the protection of reliable public registers and the prevention of illegal activities require the correct and secure identification of the participants in such transactions as well as the verification of their legal capacity. This applies, inter alia, to company founders and directors. In particular, the reliable identification of the customer in line with the ‘know-your-customer’ principle under anti-money laundering and combating the financing of terrorism (AML/CFT) rules is a prerequisite for any AML/CFT customer due diligence obligations and thus any money laundering and terrorist financing (ML/TF) prevention. Therefore, for the procedures within the scope of this Directive, Member States should be allowed to provide for complementary public electronic controls of identity, legal capacity and legality. Those complementary public electronic controls could include public remote audio-visual identity controls, including electronic checks of identity photos.

Change 2

Changed:Recital 11: (11) Applying the ‘once-only’ principle entails that companies are not asked to submit the same information to public authorities more than once. For example, companies should not have to resubmit the company documents or information already submitted to the register where the company is registered when creating a subsidiary in another Member State. Instead, information about the company should be exchanged electronically, between the register where the company is registered and the register where a subsidiary is to be registered, using the system of interconnection of registers.registers; however it should be possible to use other means to exchange documents and information, in parallel to the use of electronic means. Such information should be made available by the business register to any authority, body or person mandated under national law to deal with any aspect of the formation of a company. Documents or information transmitted as part of electronic communication through the system of interconnection of registers should not be denied legal effect or be considered inadmissible solely on the ground that they are in electronic form. They should have the same legal effectvalue as that provided by the register of the Member State where the company in question is registered.

Change 3

Added:Recital 12: (12) In order to increase transparency and trust with respect to companies in the single market, to ensure legal certainty and protection of third parties in dealings with companies in a cross-border context, to contribute to the fight against fraud and abuse, and to facilitate companies’ cross-border operations and activities, it is essential to make more company information available across the Union and to ensure that it is comparable and more easily accessible. This should be done by building on the company information that already exists in national registers and making it available at Union level through the system of interconnection of registers, as well as by providing access to more information both in the national registers and through the system of interconnection of registers.

Recital 15: (15) In order to protect the interests of third parties and enhance trust in business transactions with different types of companies in the single market, it is important to enhance reliability, transparency and provide easier access on a cross-border basis to information about so-called ‘commercial partnerships’. These play an important role in the economy of Member States and are registered in all national business registers, yet there are differences between the types of partnerships and types of information made available about them across the Union, which results in difficulties in the cross-border access to this information. To address this, the same basic information about ‘commercial partnerships’ should be disclosed in all Member States which should apply common minimum standards of preventive control to that information. The disclosure requirements as well as the legality checks for partnerships should mirror the existing disclosure requirements for limited liability companies but be adapted to the specific characteristics of partnerships. For instance, the disclosure requirements should also cover information about partners, including those that are authorised to represent the partnership. As in the case of limited liability companies, Member States should be allowed to require that partnerships disclose documents or information beyond what is required by this Directive. Where such additional documents or information contain personal data, Member States should proc…

Change 4

Removed:Recital 20: (20) In order to avoid unnecessary burden, the obligation to update the group information, should be on the ultimate parent or, where applicable, on the intermediate parent or on the subsidiary company governed by the law of a Member State. In addition, each subsidiary company should be responsible for keeping the information related to its affiliation to the group in its register up to date. In this regard, the ultimate parent or, where applicable, the intermediate parent or the subsidiary company governed by the law of a Member State should provide any changes in the group information to the (other) subsidiaries without delay in order for the subsidiaries to fulfil in time the obligation to keep the group-related information in their register up to date.

Added:Recital 16 a (new): (16a) Cooperatives have an important place in many Member States. Therefore, where information on cooperatives is also included in national registers, this information should also be accessible at Union level through the system of interconnection of registers in the same way as for limited liability companies, with certain information to be made available free of charge, and they should be unequivocally identified through the EUID.

Removed:Recital 22: (22) In addition to common standards for checking company information before it is entered into the register, it is necessary to ensure that the information in the register is kept up to date. The Financial Action Task Force recommendation 24 ‘Transparency and beneficial ownership of legal persons’, as revised in March 2022, includes requirements that company information in business registers be kept accurate and up to date. It is also in companies’ interest to make sure that their information is updated in the register because this information, including the EU Company Certificate, can be relied on by third parties. Therefore, companies should be required to disclose changes to company information without unnecessary delay and the registers should record and make available such changes in a timely manner. While the deadline for the publication of accounting documents is regulated by Directive 2013/34/EU of the European Parliament and of the Council55 , the registers should also make them publicly available without unnecessary delay.

Added:Recital 20: (20) In order to avoid unnecessary burden, the obligation to update the group information, once per year where applicable, should be on the ultimate parent or, where applicable, on the intermediate parent or on the subsidiary company governed by the law of a Member State. In addition, each subsidiary company should be responsible for keeping the information related to its affiliation to the group in its register up to date.

Removed:Recital 24: (24) In the single market, companies should be able to prove that their company is legally incorporated in a Member State through simple and reliable means, which are recognised cross-border by other Member States. Therefore, a harmonised EU Company Certificate should be established and disclosed in the register of the company. Companies could apply for such an EU Company Certificate to use it for different purposes, including for administrative procedures before national authorities and court proceedings in other Member States or before EU institutions and bodies. Such EU Company Certificate should be issued and certified by the national business registers, should include essential company information used by companies in cross-border situations, including the company name, its registered office and legal representatives, and should be available in all official languages of the Union. The electronic EU Company Certificate should be authenticated by using trust services as referred to in Regulation (EU) No 910/201456 . This EU Company Certificate should also be accessible free of charge to third parties, including authorities, which need reliable essential information about companies. Registers should be required to provide, upon request, each company registered in that register with its own EU Company Certificate free of charge. Registers and authorities in other Member States should accept an EU Company Certificate in accordance with this Directive.

Added:Recital 22: (22) In addition to common standards for checking company information before it is entered into the register, it is necessary to ensure that the information in the register is kept up to date. The Financial Action Task Force recommendation 24 ‘Transparency and beneficial ownership of legal persons’, as revised in March 2022, includes requirements that company information in business registers be kept accurate and up to date. It is also in companies’ interest to make sure that their information is updated in the register because this information, including the EU Company Certificate, can be relied on by third parties. Therefore, companies should be required to disclose changes to company information without unnecessary delay and the registers should record and make available such changes in a timely manner. While the deadline for the publication of accounting documents is regulated by Directive 2013/34/EU of the European Parliament and of the Council55, the registers should also make them publicly available without unnecessary delay.

Added:Recital 23 a (new): (23a) Company law should not be a means that permits the circumvention of important Union and Member State laws that protect the public interest. Therefore, the legality of corporate transactions and procedures with effect for the internal market and their compliance with applicable Union and national law should be checked in the public interest by public gatekeepers under Union or Member States’ public supervision.

Added:Recital 24: (24) In the single market, companies should be able to prove that their company is legally incorporated in a Member State through simple and reliable means, which are recognised cross-border by other Member States. Therefore, a harmonised EU Company Certificate should be established and disclosed in the register of the company. Companies could apply for such an EU Company Certificate to use it for different purposes, including for administrative procedures before national authorities and court proceedings in other Member States or before EU institutions and bodies. Such EU Company Certificate should be issued and certified by the national business registers, should include essential company information used by companies in cross-border situations, including the company name, its registered office and legal representatives, and should be available in all official languages of the Union. The electronic EU Company Certificate should be authenticated by using trust services as referred to in Regulation No 910/201456 . This EU Company Certificate should also be accessible free of charge to third parties, including authorities and employee representatives, which need reliable essential information about companies. Registers should be required to provide, upon request, each company registered in that register with its own EU Company Certificate free of charge. Registers and authorities in other Member States should accept an EU Company Certificate in accordance with this Directive.

Recital 25: (25) In order to further facilitate cross-border procedures for companies and simplify and reduce formalities, such as apostille or translation, a digital EU power of attorney should be established. The digital EU power of attorney will be a multilingual standard model based on a common European template which companies may choose to use in cross-border situations. It should have a minimum mandatory content, while it would be drawn up in accordance with national legal and formal requirements,. The standard digital EU power of attorney would only exist in digital form and it should be authenticated in accordance with the assurance level ‘high’ by using trust services as referred to in Regulation (EU) No 910/2014. In addition, in order to contribute to higher security of transactions and reliable public registers, the digital EU power of attorney should be signed using qualified electronic signatures. In cases where the digital EU power of attorney is certified or authenticated, the certifying or authenticating authority should use qualified electronic signatures or seals, including its specific attributes in accordance with Regulation (EU) No 910/2014. The digital EU power of attorney should be filed in the register of the company where third parties that can demonstrate legitimate interest can consult it. In particular, third parties, such as lawyers, notaries, credit and financial institutions or competent authorities could thus verify the existence of these powers of attorn…

Recital 27: (27) At the same time, in order to prevent fraud or forgery, it should be possible for the authorities of the Member State in which the company document or the information it contains, where they have a reasonable doubt as to its authenticity and accuracy, to verify the document or information via the issuing register or the register in its own Member State, which could exchange information about the authenticity of the document through the system of interconnection of registers. Such exchange of information should contribute to the mutual trust and cooperation between Member States within the single market.

Change 5

Changed:Recital 30: (30) In order to help companies, and in particular SMEs, to expand their business activities cross-border more easily, the ‘once-only’ principle should be further developed in cases where companies register branches in another Member State. The information about the company registering the cross-border branch should be retrieved electronically from the register of the company by the register of the branch through the system of interconnection of registers.registers; however, it should be possible to use other means to exchange documents and information in parallel to the use of electronic means. This exchange of information, as any other exchange of information between registers through the system of interconnection of registers, will be carried out via secure transmission between national registers, which ensures that the information can be trusted and should not be required to be certified or subject to any legalisation or similar formality. Documents or information transmitted as part of electronic communication through the system of interconnection of registers should not be denied legal effect or be considered inadmissible solely on the ground that they are in electronic form. They should have the same legal effectvalue as that provided by the register of the Member State where the company in question is registered.

Change 6

Added:Recital 38: (38) The Commission should carry out an evaluation of this Directive within five years of the end of its transposition period. Pursuant to paragraph 22 of the Interinstitutional Agreement of 13 April 2016 on Better Law-Making, that evaluation should be based on the five criteria of efficiency, effectiveness, relevance, coherence and value added and should provide the basis for impact assessments of possible further measures. The evaluation should cover the practical experience with the EU Company Certificate, digital EU power of attorney and the reduced formalities in cross-border situations for companies. In addition, the Commission should assess the potential for cross-sector interoperability between the system of interconnection of registers (BRIS) and other systems providing mechanisms for cooperation between competent authorities, such as in the areas of taxation or social security or the Once-only Technical System established under Regulation (EU) 2018/1724 of the European Parliament and of the Council64 , with the aim of creating more connected public administrations cross-border in the single market65 . Finally, the Commission should also assess the need to introduce additional measures to fully address the needs of persons with disabilities when they access company information provided by the business registers.

Directive (EU) 2017/1132

Change 7

Changed:Article 2 – paragraph 1 – point 5, Article 10 – paragraph 1: 1. Member States shall provide for preventive administrative, judicial or notarial control, or any combination thereof, at the time of the formation of a company, of the instrument of constitution, the company statutes and any amendments to those documents. This is without prejudice to national laws that, in accordance with Member States’ legal systems, require that those documents are to be drawn up and certified in due legal form.

5 unchanged paragraphs

Directive (EU) 2017/1132

Article 2 – paragraph 1 – point 5, Article 10 – paragraph 2 – subparagraph 2 – point c: (c) the substantive legal requirements are met; and

Directive (EU) 2017/1132

Article 2 – paragraph 1 – point 5, Article 10 – paragraph 2 – subparagraph 3: deleted

Directive (EU) 2017/1132

Change 8

Removed:Article 2 – paragraph 1 – point 5, Article 10 – paragraph 4 – subpargraph 1: The rules laid down in Article 13g(3), points (a), (d), (e), (f), Article 13g(4), points (b) and (c), and Article 13g(5) and (7), shall apply mutatis mutandis to other forms of formation of the companies listed in Annexes II and IIB that are not fully online.

Added:Article 2 – paragraph 1 – point 5, Article 10 – paragraph 3: 3. Member States may waive the obligation to perform the legality check under paragraph 2, point (b), of this Article where templates referred to in Article 13h are used by applicants.

Directive (EU) 2017/1132

Change 9

Removed:Article 2 – paragraph 1 – point 12 – point a, Article 13g – paragraph 2a – subparagraph 3a: Documents or information transmitted as part of electronic communication through the system of interconnection of registers shall not be denied legal effect or be considered inadmissible solely on the ground that they are in electronic form. They shall have the same legal effect as that provided by the register of the Member State where the company in question is registered.

Added:Article 2 – paragraph 1 – point 5, Article 10 – paragraph 4 – subpargraph 1: The rules laid down in Article 13c, Article 13g(3), points (a), (d), (e), (f), Article 13g(4), points (b) and (c), and Article 13g(5) and (7), shall apply mutatis mutandis to other forms of formation of the companies listed in Annexes II and IIB that are not fully online.

Directive (EU) 2017/1132

Change 10

Removed:Article 2 – paragraph 1 – point 16, Article 14a – paragraph 1– point f: (f) information about the partners with unlimited liability, indicating their liability status as unlimited, as well as information about the partners with limited liability, indicating the maximum possible extent of their liability;

Added:Article 2 – paragraph 1 – point 12 – point a, Article 13g – paragraph 2a – subparagraph 1: Member States shall ensure that, where a company listed in Annex II or IIB forms a company in another Member State, the register of the Member State where the company is being formed is to retrieve, through the system of interconnection of registers referred to in Article 22, the documents and information about the founder company relevant for the procedure of formation available in the register of the Member State where that company is registered, and the company shall not be requested to provide that information or those documents. The register may also retrieve the EU Company Certificate under Article 16b. The register may nevertheless use other means to retrieve the documents and information about the founder company, in parallel to using the system of interconnection of registers referred to in Article 22.

Directive (EU) 2017/1132

Change 11

Removed:Article 2 – paragraph 1 – point 16, Article 14a – paragraph 1 – point g: (g) the instrument of constitution, and the statutes if they are contained in a separate instrument

Added:Article 2 – paragraph 1 – point 12 – point a, Article 13g – paragraph 2a – subparagraph 3 a (new): Documents or information transmitted as part of electronic communication through the system of interconnection of registers shall not be denied legal effect or be considered inadmissible solely on the ground that they are in electronic form. They shall have the same legal value as that provided by the register of the Member State where the company in question is registered.

Directive (EU) 2017/1132

Change 12

Removed:Article 2 – paragraph 1 – point 16, Article 14b – paragraph 6: 6. The ultimate parent company or, where applicable, the intermediate parent company or the subsidiary company referred to in paragraph 2 shall update the information required in paragraphs 1 to 3.

Added:Article 2 – paragraph 1 – point 15 – point b, Article 14 – paragraph 2 – point m a (new): (ma) the object and the sectors of activity of the company, with the use of the Statistical Classification of Economic Activities in the European Community (NACE), where these codes are used according to applicable laws of a Member State;

Directive (EU) 2017/1132

Change 13

Removed:Article 2 – paragraph 1 – point 16, Article 14b – paragraph 8: 8. In the case of changes to the information referred to in paragraph 5, each subsidiary company of the group governed by the law of a Member State, including any intermediate parent company, shall disclose such changes in the register where it is registered within a deadline of two weeks as from the date the changes were made, or from the date it was made aware of the changes.

Added:Article 2 – paragraph 1 – point 16, Article 14a – paragraph 1– point f: (f) the total amount of the contributions of the partners and information about the partners with unlimited liability, indicating their liability status as unlimited, as well as information about the partners with limited liability, indicating the maximum possible extent of their liability;

Directive (EU) 2017/1132

Change 14

Removed:Article 2 – paragraph 1 – point 17, Article 15 – paragraph 2 – point a: (a) that any changes to the documents and information on companies listed in Annex II and IIB shall be filed with the register within a time period not exceeding 15 working days as from the date the changes were made. This time period shall not apply to changes to the information to be disclosed under Article 14b and accounting documents referred to in Article 14, point (f), and Article, 14a point (l);

Added:Article 2 – paragraph 1 – point 16, Article 14a – paragraph 1 – point g: (g) the instrument of constitution, and the statutes if they are contained in a separate instrument;

Directive (EU) 2017/1132

Change 15

Added:Article 2 – paragraph 1 – point 16, Article 14b – paragraph 1 – point d: (d) the name of the group, if such a name exists and is different from the name of the ultimate parent company.