Implementation of the directive on digitalisation in company law
Following the EU Digitalisation Directive, the chamber of deputies is currently debating a bill to amend corporate law legislation. The main aim of the new legislation is to simplify and speed up the establishment of corporations, and to strengthen cooperation between the public registers of EU member states.
The proposed changes will mainly affect the Business Corporations Act, the Act on Public Registers, and the Trade Licensing Act. The proposed effective date is 1 July 2022 (except for a few sections concerning mainly the register of foundations).
The first significant change is the introduction of a register of disqualified persons: a non-public register of all persons disqualified from exercising an office of a member of an elected body of a business corporation. The register will only be accessible to notaries and courts that will perform a check before entering the person in the commercial register. The registers should be interconnected across the EU. The explanatory memorandum assumes that the new members of business corporations’ bodies will no longer have to submit extracts from their criminal records, which will significantly speed up the process of establishing a company or registering a new member.
A welcome novelty is the possibility to establish a company without first notifying the Trade Licensing Office of its trade. At present, a company that wants to do business under the Trade Licensing Act must notify the Trade Licensing Office of its trade and wait for its confirmation. Only then can it file for being recorded in the commercial register. Under the new rules, these processes would be independent of each other. If the trade is the sole purpose of the company, and the company fails to obtain the necessary permit within the set deadline, the court may dissolve the company.
The establishment of limited liability companies will also be facilitated by publishing a model memorandum of association on the Ministry of Justice’s website.
The proposed changes will greatly simplify standard corporate affairs. However, their use in practice may at first be different from what the legislator envisages in the explanatory memorandum. Furthermore, the applicability of some of the proposed amendments will also depend on the directive’s transposition in other EU member states. As the legislative process has only just began, we may still see changes to the wording of the bill.