The Informal Company Law Expert Group established by the European Commission published a report on digitalisation in company law in March 2016. In its eGovernment Action Plan 2016-2020, the Commission said it will, among other things, present an initiative to facilitate the use of digital solutions throughout a company's lifecycle.
The report advocates a technology neutral approach and an approach that lets national systems interact across borders so that the public can have easy online access to all public information. It suggests that member states should be required to allow the online formation of companies without a founder or others having to be physically present in the relevant member state. It proposes that member states should have to make standard articles or other constitutional documents available electronically for use in forming a company. It also proposes that companies and branches should be able to meet all filing requirements online without being physically present in the member state. At present, registries need only certify electronic copies they provide as true copies if so requested. The report suggests this should be the default position.
The report also proposes companies should be able to use digitalisation in their internal affairs and in communications with shareholders and other stakeholders if they wish to do so, and that company law should facilitate this.
Whilst some member states are very advanced in their use of digitalisation for companies, others are not. The same applies to the public, where some persons and companies may be better at using IT than others. These differences should be taken into consideration by the regulatory set-up. If the recommendations are taken forward, there would be a significant improvement in access to company information and in the ability to set companies up online.
Vanessa Knapp is an independent consultant who lectures and provides training on company law and corporate governance, as well as chair of the company law committee of the Council of Bars and Law Societies of Europe (‘CCBE’). Jesper Lau Hansen is a Professor at the University of Copenhagen – Faculty of Law. They are both members of the EU’s Informal Company Law Expert Group (‘ICLEG’).