The European commissioner for justice has told a corporate governance conference in Tallin that she expects to table proposals for a company law initiative, which would facilitate cross-border business and promote digital processes and tools for companies doing business in other EU member states.
“To fully use the opportunities the single market could offer, companies need to be able to merge smoothly, divide or move across borders,” European commissioner Věra Jourová told the 21st European Company Law and Corporate Governance Conference in Tallin, Estonia on Monday.
She added that the EU needs to examine whether its rules on cross-border mergers are still “fit for purpose” and noted that there is no legal framework for companies to divide across borders or convert to another member state.
“Also, at present, companies do not know which law applies to them in cross-border situations,” she said. “And sometimes they face contradictory laws at the same time. There are no uniform conflict-of-law rules as regards company law.”
Regulators must strive to promote the use of digital technology for companies, said Jourová. “The EU single market cannot function effectively unless companies are able to use digital tools and processes easily and efficiently everywhere in the EU.”
Processes in the EU are too complicated for companies to do cross-border business, according to European Parliament member Kaja Kallas. She told the conference: “All the processes are so different in so many member states that they [companies] just say ‘I won’t bother’”.
Kallas urged lawmakers to develop a system that is not too complicated, and called for a “common approach” across the EU.
The European Commission announced in its work programme for 2017 that it wanted to facilitate the use of digital technologies and cross-border mergers and divisions. A public consultation on the proposals ended on 6 August.