Company law and corporate governance

The purpose of EU rules in this area is to

• enable businesses to be set up and to carry out operations anywhere in the EU
• provide protection for shareholders and other parties with a particular interest in companies, such as employees and creditors
• make business more efficient, competitive and sustainable in the long term
• encourage businesses based in different EU countries to cooperate with each other.

EU company reporting, auditing and transparency rules complement this legal framework.

Company reporting and auditing

EU company law rules cover issues such as the formation, capital and disclosure requirements, and operations (mergers, divisions) of companies

Directive 2017/1132 - Digital company law 

A large part of EU company law is now codified in a single Directive - Directive 2017/1132 relating to certain aspects of company law.

The proposal for a Directive to further expand and upgrade the use of digital tools and processes in company law was adopted by the Commission on 29 March 2023. It aims to improve transparency and trust in the business environment in the single market, by making more information about companies publicly available and by ensuring that company information in business registers is reliable and up-to-date, and to reduce administrative burden when companies use company information from business registers in cross-border situations. In March 2024, the Council and the European Parliament provisionally agreed on the proposal. The Directive now needs to be formally adopted by both co-legislators. It will enter into force 20 days after publication into the Official Journal.

Find all documents on the proposal for a Directive to further expand and upgrade the use of digital tools and processes in company law

Directive 2019/1151 of 20 June 2019 covers provisions on the use of digital tools and processes in company law. The transposition deadline for most provisions expired in August 2022 but Member States had until August 2023 to transpose certain Articles. Directive (EU) 2019/2121 of 27 November 2019 lays down new rules on cross-border conversions and divisions and amends the rules on cross-border mergers. Its transposition deadline expired in January 2023. This new set of rules will enable companies to use digital tools in company law procedures and to restructure and move cross-border, while providing strong safeguards against fraud and to protect stakeholders. 

The 2023 proposal and the 2019 Directives revise and complement Directive 2017/1132.

Directive 2012/17 - System of interconnection of business registers (‘BRIS’)

Directive 2012/17/EU and Commission Implementing Regulation (EU) 2021/1042 set out rules on the system of interconnection of business registers (‘BRIS’). BRIS is operational since 8 June 2017. It allows EU-wide electronic access to company information and documents stored in Member States’ business registers via the European e-Justice Portal. BRIS also enables business registers to exchange information between themselves on cross-border operations and on companies and their cross-border branches. The implementation report on the development of BRIS, and in particular on its technical operation and financial aspects as regulated by Directive 2012/17/EU, was published on 29 March 2023.

Directive 2009/102 - single-member companies

Directive 2009/102/EC provides a framework for setting up single-member companies.

Regulation 2157/2001 and Regulation 2137/85 - EU legal entities rules

Two Regulations provide rules on EU legal entities: Regulation 2157/2001 sets out a statute for a European Company (Societas Europaea or ‘SE’), i.e. a EU legal form for public limited liability companies, and allows companies coming from different Member States to run their business in the EU under a single European brand name. Regulation 2137/85 sets out a statute for a European Economic Interest Grouping (EEIG), i.e. a EU legal form for a grouping formed by companies or legal bodies and/or natural persons carrying out economic activity coming from different Member States; the purpose of such a grouping is to facilitate or develop the cross-border economic activities of its members. 

 EU company law rules also address corporate governance issues, focusing on relationships between a company’s management, board, shareholders and other stakeholders, and therefore, on the ways the company is managed and controlled.

• Shareholders rights Directive 2007/36/EC   sets out certain rights for shareholders in listed companies

  This Directive was amended by Directive (EU) 2017/828, which aims to encourage more long-term engagement of shareholders.

  Furthermore, the 2018 Commission Implementing Regulation (EU) 2018/1212 lays down minimum requirements as regards shareholder identification, the transmission of information and the facilitation of the exercise of shareholders rights.

• Takeover bids Directive 2004/25/EC  sets out minimum standards for takeover bids (or changes of control) involving securities of EU companies.

• In the framework of the 2020 Capital Markets Union Action Plan, and more specifically, under the tasks envisaged under Action 12, aiming at facilitating shareholder engagement, the Commission committed to examining possible national barriers to the use of new digital technologies in the interaction between investors, intermediaries and issuers. A Staff Working Document was issued on 21.12.2022 (SWD(2022) 447 final), on the assessment and conclusions on this point of Action 12.

  • 16 JANUARY 2023

  Commission staff working document on Action 12 of 2020 Capital Markets Union Action Plan

  English

  (539.25 KB - PDF)

  Download

In line with the overall Commission objective of a just transition to a sustainable economy and a sustainable recovery after the COVID crisis, the European Green Deal Communication and Commission’s Recovery Plan confirmed the importance of embedding sustainability into corporate governance. The Directive on corporate sustainability due diligence (Directive 2024/1760) aims at better enabling companies to identify and mitigate actual or potential human rights and environmental adverse impact in the companies’ operation and value chains. The Directive entered into force on 25 July 2024.

Specific rules on corporate governance and remuneration apply to banks and investment firms. The aim of these rules is to curb excessive risk taking, and thereby ensure financial stability.

• Rules on corporate governance and remuneration for banks and systemic investment firms can be found in the Capital Requirements Directive (Directive 2013/36/EU as amended by Directive 2019/878/EU) and the Capital Requirements Regulation (Regulation No 575/2013 as amended by Regulation No 2019/876).

• On 27 October 2021, the European Commission adopted a review of EU banking rules (the Capital Requirements Regulation (CRR) and the Capital Requirements Directive (CRD)). The review proposes, among other issues, a common set of standards and procedures to have more consistency across the EU for assessing the suitability of board members and influential managers (“key function holders”).

  For further information on the banking package adopted in October 2021: Banking package 

• Rules on corporate governance and remuneration for non-systemic investment firms can be found in the Investment Firms Directive (Directive 2019/2034) and the Investment Firms Regulation (Regulation 2019/2033).

Thus, while systemic investment firms remain under the banking rules, non-systemic investment firms are subject to a bespoke regime. For more information: Prudential rules for investment firms. 

Informal Expert Group on Company Law and Corporate Governance (ICLEG)

This group – consisting of company law professors and professionals - advises the Commission in the preparation of company law initiatives. The group was first set up in 2014 and renewed its membership in 2019 following a new call for applications in light of new challenges for company law and corporate governance. Find more information on the ICLEG group and on its work. 

Company law and corporate governance teams in DG Justice and Consumers are saddened by the news that Prof. Dr. Gerald Spindler passed away suddenly on 11 September 2023. We share our deepest condolences with his family and the academic community he was part of. Prof. Dr. Spindler’s contribution to ICLEG’s academic work was much valued and appreciated. He will be missed in this group.

• Report on transparency of company data (March 2023)
• Report on cross-border use of company information (March 2023)
• Report on virtual shareholder meetings and efficient shareholder communication (August 2022)
• Report on recognition of the interest of the group (October 2016)
• Report on information on groups (March 2016) 
• Report on digitalisation (March 2016) 

Online Platform on Corporate Governance

This is a digital space for information sharing and the exchange of best practices on a number of different corporate governance topics, ranging from investor stewardship to sustainability. The platform encourages a dialogue between companies, investors, private and public stakeholders and aides the Commission in evaluating whether former measures achieve their purpose in practice. To find out more, please send an email to just-cg-opec [dot] europa [dot] eu (just-cg-op[at]ec[dot]europa[dot]eu)

Find all the studies on company law and corporate governance