The purpose of EU legislation in the areas of company law and corporate governance is to support the free movement of establishment under Article 49(2) TFEU.
This Article sets out the right to take up and pursue activities as a self-employed individual and to set up and manage undertakings, i.e. companies or firms. Specific rules are needed to enable businesses to set up in the EU, and to provide protection for shareholders and other parties with a particular interest. The EU rules in this area aim to make businesses more efficient and competitive and to encourage businesses based in different EU countries to cooperate with each other.
Current developments in company law and corporate governance
The Commission is particularly interested in developing new initiatives in company law for the digital age. The Commission is considering initiatives on online registration of companies, electronic submission of documents, electronic voting systems for companies’ stakeholders as well as digital solutions to allow access to more meaningful and comprehensive information on European companies and their structures.
The Commission is also looking to initiate another review of the EU insolvency law regime. It announced that it is looking into transposing the 2014 recommendations into binding legislation which will implement a second chance culture for companies which are facing difficulties.
Furthermore, there are proposals being considered by the Parliament and the Council on longterm shareholders’ rights and single member private limited liability companies.
Brussels Office engagement
The Brussels Office is monitoring and advising the Law Societies’ company law practitioners about the EU developments and current proposals. In 2015 the Brussels Office ensured that the Law Society of England and Wales was represented in the Commission organised conference on digitalisation of company law. Furthermore, the Law Society of England and Wales has adopted an opinion on the longterm shareholder proposal. The Brussels Office is also involved in finding ways in which the voice of UK legal practitioners can be heard as the new insolvency proposals will be rolling out.