Last year, we had already reported that the European Commission intended to digitize corporate law, planning to set up cross-border companies online. The European legislator has now adopted the amendment to the Directive as regards the use of digital tools and processes in company law (http://www.europarl.europa.eu/doceo/document/TA-8-2019-0428_EN.pdf). Online formation and registration is thus coming another step closer. From a formal point of view, the amendment of the Directive still requires the approval of the Council of the European Union, but it is unlikely that it will be rejected.
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In principle, the Directive is to be transposed into national law within two years. Accordingly, Member States will have to offer the cross-border online formation of a limited liability company (GmbH) in the future. Member States are able to decide independently whether online formation will also be offered for other legal forms, such as stock corporations (AG) or partnerships limited by shares (KgaA).
It must be possible to register the companies entirely online. Consequently, it should no longer be necessary for applicants to appear in person before an agency or a notary. Only in exceptional cases should it be possible to demand the applicant’s actual presence (such as where the presence is justified by reason of the public interest in preventing identity misuse or alteration) (Article 13b(4)) or in cases in which a physical presence appears necessary to ensure legal capacity and the authority of applicants to represent a company (Article 13g(8)).
The Directive also obligates Member States to ensure that all documents and information can be filed in electronic form. This also applies to proof that the share capital has been paid up. For the online formation of a GmbH, Member States must offer templates in an official Union language and, for information purposes, at least in a language broadly understood by the larges possible number of cross-border users.
The fact that, when the template documents are used for online formation, registration of the company in the commercial register must be completed within five working days (after electronic receipt of the required documents at the competent office and payment of a fee or deposit of the share capital) is also of particular importance. If the template documents are not used, registration must occur within ten working days.
The Directive now adopted by the European Parliament is to be welcomed, not only from the point of view of numerous start-up founders. Some M&A transactions and intra-group restructuring transactions are also set to be considerably simplified in the future if, for example, the presence of representatives and the procurement of powers of attorney for persons resident abroad are no longer required as a result of the Directive. The registration obligation of five or ten working days provided for in the Directive is also designed to provide more planning security.
It remains to be seen, however, how the German legislator will structure the role of civil law notaries in company formation and what measures will be taken to protect the use of digital instruments and the data used against misuse.