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Company law and corporate governance

EU rules and activity in this area, Informal Company Law Expert Group, action plan on company law and corporate governance.

EU Inc. Proposal

In its January 2025 Competitiveness Compass, the Commission unveiled plans for a "28th regime" aimed at bolstering the competitiveness of the European economy. A centerpiece of the 28th regime is the EU Inc. proposal. The initiative provides a new, unified corporate legal regime that will apply across the Single Market, thanks to which EU Inc. companies will have access to simple, flexible, digital and fast procedures throughout their whole life cycle.

EU Inc.: A new harmonised corporate legal regime

EU rules in this area

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

Formation, capital, disclosure requirements and operations of companies

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.

Directive (EU) 2025/25 of 19 December 2024 as regards further expanding and upgrading the use of digital tools and processes in company law entered into force on 30 January 2025. This Directive will significantly reduce administrative burden for companies by simplifying formalities and providing “digital by default” solutions. For instance, it will apply the once-only principle so that companies do not have to resubmit documents when setting up subsidiaries or branches in other Member States and introduce the EU Company Certificate, i.e. the European corporate passport for companies. It will also 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.

Directive 2019/1151 of 20 June 2019 covers provisions on the use of digital tools and processes in company law. It has several transposition deadlines, with the last deadline expiring in 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. 

Directive (EU) 2025/25, Directive 2019/1151 and the Directive (EU) 2019/2121 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. 

Corporate governance issues

 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 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.
  • Multiple-vote share Directive (EU) 2024/2810 lays down common rules on multiple-vote share structures in companies that seek admission to trading of their shares on multilateral trading facilities.

Corporate Sustainability Due Diligence

The Directive on corporate sustainability due diligence (Directive (EU) 2024/1760) was adopted under the European Green Deal and the Commission’s Recovery Plan to underpin the European Union’s overall objective of a green and just transition and a sustainable recovery after the COVID crisis by embedding sustainability into corporate governance. Building on existing voluntary frameworks of the UN, the OECD and the ILO, the Directive requires very large companies active in the EU market to identify and mitigate actual and potential human rights and environmental adverse impact in their own operations, in the operations of their subsidiaries and in their value chains. The Directive entered into force on 25 July 2024. It was subsequently amended by the first Omnibus simplification package adopted under the EU’s competitiveness agenda to reduce companies’ compliance burden without undermining the initial policy objectives.

In line with its amendment by Directive (EU) 2026/470, the Directive has to be transposed by Member States into their national laws by 26 July 2028. It will start to apply to companies that meet the conditions and reach the thresholds defined in the Directive – limited liability companies and partnerships, including ultimate parent companies, franchisors and licensors, and regulated financial undertakings of other legal forms that are domiciled in the EU and are individually or on a consolidated basis very large, as well as to similar non-EU companies with very large turnover generated in the EU – as from 26 July 2029. The Commission will issue a broad set of guidelines to support implementation. National supervisory authorities – also as part of an EU network – will be responsible for enforcing compliance with the rules. Where a company is held liable under a Member State’s civil liability law for damages caused to a natural or legal person by a failure to comply with the due diligence requirements, victims will have a right to full compensation.

For more information: Corporate sustainability due diligence - European Commission

Corporate governance and remuneration for banks and investment firms

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 by Directive (EU) 2024/1619) and the Capital Requirements Regulation (Regulation No 575/2013, as amended by Regulation No 2019/876 and by Regulation (EU) 2024/1623).

    The Capital Requirements Directive sets out, among others, consistent and predictable substantive and procedural rules for the assessment of bank managers’ suitability. These rules aim to ensure legal certainty for banks and their managers, to foster supervisory convergence between banking authorities in the Union. They also contribute to the robustness and sound management of banks.

  • 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.

Expert groups and stakeholder platforms

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 and corporate governance initiatives. The group was first set up in 2014 and its membership was renewed in 2019 following a new call for applications. The term of office of ICLEG members and observers was extended in 2024. Find more information on the ICLEG group and on its work.