EU rethinks its role in scope of corporate activities

The European Union has a long and ambiguous role in shaping the nature of corporate activities. Member states like to keep control over what is and is not a company, that is, over who is and is not entitled operate as one under their individual laws. A European Company statute came into being some time ago, allowing a company to register in a way that allowed it to operate as one entity without registering subsidiaries, but its scope has been limited. Now the European Commission wants to take another look at the whole area of European involvement, and it's asking a series of questions:

• Objectives and scope: What should be the main objectives of European company law? Are the current rules fit for today's challenges? In which areas is there need for further evolution? What relationship between company law and corporate governance?
• Codification : Should the existing company law Directives be merged in a single instrument in order to make the regulatory framework more accessible and user-friendly?
• Future legal forms: What are the advantages and shortcomings of European company forms? Do existing company forms need to be reviewed? Should alternative instruments be explored?
• Cross-border mobility: What can be done to facilitate the cross-border transfer of a company's seat? What if a company splits into different entities cross border? Should the rules on cross border mergers be reviewed?
• Groups: For a set of companies under a single management or source of control, is there need for EU policy action in this field?
• Capital: Should the existing minimum legal capital requirements and rules on capital maintenance be modified and updated?

These are pretty sweeping questions and ones where member states will probably have quite a bit to say about how much Brussels gets involved. But with the eurozone crisis leading to constraints on the sovereignty of governments in much of fiscal and economic life, this type of inquiry might well seem a natural extension, particularly if it seems to be eliminating roadblocks to economic growth. The consultation closed on May 14.

Source document: The consultation website has further details of the questions.