MEPs give green light to comprehensive set of measures allowing companies to benefit from online tools.

The Legal Affairs Committee approved rules that enable businesses to entirely register their companies and their branches online, as well as digital filing of company documents and information. This would further reduce costs, time and administrative burdens, especially for micro, small and medium-sized enterprises, stress MEPs.

Online registration is voluntary and should not require the applicant to appear in person before a competent authority during the procedure. However, member states may require physical presence in exceptional cases and only on a case-by-case basis. The text also guarantees that those who want to set up companies and branches cross-border must be provided with comprehensive and accessible information on the procedure.

The rapporteur Tadeusz Zwiefka (EPP, PL) said: "It is high time European entrepreneurs benefit from new technologies as well as in their cross-border activities. Online registration and online filing of information and documents for companies and branches is a first but necessary step. It will save time and money and encourage European companies to grow. Together with rules implemented under EIDAS regulation and interconnection of business registers, we create a safe and transparent environment for companies to act."

Background information

In the EU there are significant differences between member states when it comes to the availability of online tools for companies in their contacts with public authorities in the area of company law. There are around 24 million companies in the EU, out of which approximately 80% are limited liability companies. Around 98-99% of limited liability companies are SMEs.

The 2015 Digital Single Market Strategy and the 2016 e-Government Action Plan stressed the role of public administrations in helping businesses to easily start business, operate online and expand across borders. The European Parliament, in its 2017 resolution on the e-Government Action Plan, called on the European Commission to consider further ways to promote digital solutions for formalities throughout a company's lifecycle and underlined the importance of work on the interconnection of business registers.

Next steps

The draft legislation was adopted with 20 votes to 1, with 3 abstentions. The vote on the decision to enter into negotiations is postponed to 6 December. Once plenary has endorsed the negotiating mandate, talks with the Council of Ministers can start.