ACCA welcomes the new company law package
ACCA (the Association of Chartered Certified Accountants), BusinessEurope and UEAPME, with the support of EY, recently organised a lively discussion with European decision-makers and stakeholders to shed light on recent EU company law developments and how to make the best of digital solutions and cross-border mobility.
The event was held to bring together experts following the European Commission’s unveiling on the 25 April of its long-awaited company law package, aiming to modernise the legislative framework for European businesses.
The rules are intended to make it easier for companies to merge, divide or move within the European Union, to prevent ‘social dumping’ - or cheap labour; tax evasion and other forms of abuse. It contains two main elements - a mobility chapter relating to cross-border operations, and a digitalisation chapter.
The Commission’s proposals seek to ensure the effective exercise of the freedom of establishment within the internal market, while protecting the rights of tax authorities, employees, creditors and minority shareholders against abuse of legal personality.
Striking the right balance between the freedom of establishment – in enabling mobility of companies by establishing clear rules on cross-border mergers, divisions and conversions, as well as removing unnecessary obstacles - and the protection of stakeholders with safeguards are the main issues at stake.
Věra Jourová, European Commissioner for Justice, Consumers and Gender Equality, welcomed the first positive reactions to the package, and stressed her determination to conclude negotiations on these texts before the end of the current European Parliament’s mandate, and that she relied a lot on the Austrian Presidency to reach that ambitious aim.
Jytte Guteland, MEP, S&D and JURI Committee said: 'We welcome the two initiatives of the Company law package. The European Parliament has several times called for a directive of cross-border transfer of company seats with meaningful worker's participation. We also called on the Commission to come up with rules on cross-border conversions with adequate safeguards for employees, creditors and shareholders in order to create a fairer Single Market. It's important that the freedom of establishment of the EU law does not open up for further forum shopping for evading taxation, or social or workers´ rights and that there are sufficient safeguards, which we, MEPs, will aim for.'
The company law package was long-awaited by businesses of all sizes and most stakeholders. The debate confirmed that the measures are generally seen as rightly addressing important issues for companies and as a good, constructive basis for discussion, providing some adjustments.
The spectrum of opinions is very broad. Business representatives stressed the importance of removing the red tape and called for clear and simple procedures. Many asked for an efficient and quick process without physical appearance, as well as safeguards that come with the digitalisation proposal. Practitioners ask for legal certainty, efficiency and transparency. Some called for good protection against fraud, with stronger connection between the register and real activities, while others criticised that fraud is mentioned too often in the proposals, whereas their focus should be on the many honest entrepreneurs. According to some stakeholders, company law should not be a tool to fight tax evasion. For others, the proposal is too business-friendly and does not go far enough in the worker’s protection.
Jason Piper, head of business law at ACCA, who moderated the panel said: 'As a professional body with members advising businesses across the EU on the best economic outcomes for their operations, ACCA is happy to see this package with its blend of practical forward looking steps alongside many important structural legal protections. The key test, though, will be for the proposals to deliver options for business which are more attractive than any of the “unregulated” alternatives.'
Luc Hendrickx, Director of Entreprise policy and External Relations at UEAPME said: 'Due to the exemplary consultation process, the digital tools proposal fulfils nearly all expectations of SMEs in this field. As legal certainty of the verification of the identity is a key condition for the trustworthiness of companies, we insist that the highest European standards for identity checks are set. We call on the European parliament and the Council to adopt the proposal without delay.'
Peter Martschini, representing at the time of the event the still incoming Austrian Presidency of the Council of the EU concluded: 'Expectations were really high when the European Commission unveiled the Company Law Package. Overall, the proposals are very welcome but the right balance between enabling mobility and providing adequate safeguards needs to be our priority. Finding the best use of digital tools in company law to improve the registration process, while at the same time ensuring the quality and reliability of business registers. The Austrian Presidency will work on the proposals in an ambitious way and put all the efforts that are needed in order to move forward.'
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Notes to Editors
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ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants, offering business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management.
ACCA supports its 200,000 members and 486,000 students in 180 countries, helping them to develop successful careers in accounting and business, with the skills required by employers. ACCA works through a network of 101 offices and centres and more than 7,200 Approved Employers worldwide, who provide high standards of employee learning and development. Through its public interest remit, ACCA promotes appropriate regulation of accounting and conducts relevant research to ensure accountancy continues to grow in reputation and influence.
ACCA is currently introducing major innovations to its flagship qualification to ensure its members and future members continue to be the most valued, up to date and sought-after accountancy professionals globally.