A step towards easier cross-border cooperation between companies – recent changes to EU company law

The European Union (EU) is taking another step towards a digital world – a new Directive of the European Parliament and of the Council, which should make it easier for companies to operate across borders, was adopted on 19 December 2024.

Currently, there are administrative and legal obstacles, especially when it comes to proving the status of your company or verifying registers in other Member States, which leads to the need for additional legalisation requirements (such as apostilles).The Directive also aims, at EU level, to ensure greater availability of company data, to help strengthen mutual trust and cooperation between Member States in the internal market and to facilitate their direct use in cross-border activities.

Digital tools for companies – more data, less bureaucracy

Given the different national procedures for ex-ante verification of company documents and information, there are some uncertainties about the data provided in the register of other Member States. To ensure that the information provided is reliable, the Directive sets minimum standards for the verification of company data and Member States will be obliged to ensure that information on companies is accurate.

The interconnection of several existing EU-wide registry systems, including the Business Registers Interconnection System (BRIS), the Beneficial Ownership Registers Interconnection System (BORIS) and the Insolvency Registers Interconnection System (IRI), will make company data more easily accessible across the EU.

The Directive also introduces the principle of single submission – companies will only have to submit certain data once, even if they expand their activities to other EU Member States.

Accordingly, a company setting up a legal entity in another Member State would not have to resubmit information contained in the registers of that company’s Member State.

Thus, facilitating the cross-border use of company data creates easier conditions for cross-border activities, the establishment of new subsidiaries or branches in another Member State.

The Directive also provides for new digital documents. One of them is the multilingual digital EU Power of Attorney, an electronic document whose content complies with national legal requirements for cross-border procedures.

This power of attorney, which will be lodged in the company register, will allow lawyers, notaries, financial institutions, public authorities and other persons with a legitimate interest to check its validity, thus simplifying business procedures in the single market and reducing the formalities of apostilles and translations.

In addition to the digital EU mandate, the Directive also aims to introduce an EU company certificate, which will enable companies in the single market to prove in a simple and cross-border recognised way that the company is legally registered in a Member State.

This certificate, which will have to be issued and validated by national registers, will contain basic information in all EU languages, including the name of the company, the address of its registered office, its representatives, etc. Member States’ authorities and registers will be obliged to recognise and accept the EU company certificate, which should ease the administrative burden for companies when carrying out cross-border administrative procedures, legal proceedings and other business operations in the single market.

Both European templates will be made available electronically and authenticated through the trust services set out in Regulation (EU) No 910/2014, in order to guarantee that the documents contain true and relevant information.

These changes pave the way for a more innovative business environment in Europe, giving companies more opportunities to grow internationally by eliminating the formalities of legalisation and strengthening mutual trust between Member States’ registers.