OPINION | Wednesday, 29 August 2007
EU Commission views and possibly yours
EU company law and accounting rules are a reality which quite a number of local business concerns have had to adapt to. The European Commission is seeking ways to reduce or altogether remove regulations in these areas that may have been leading to a number of administrative requirements which are now being deemed disproportionate or obsolete. Change is also being considered in the light of European Court of Justice case-law that has provided further clarifications.
In a Communication published by the Commission, a number of issues are targeted. The EU Commission is not, at this stage, tabling concrete proposals. Its aim is to identify issues and indicate what steps it could take. These include abolishing company law Directives related to domestic situations such as mergers, divisions, and the capital of plcs and private single-member limited-liability companies, thus ensuring that more focus is laid on cross-border issues. Given that this may be deemed as excessive in itself, it also points out to a somewhat softer option: eliminating particular obligations for information in some Company Law Directives, specifically the Third and Sixth with the possibility of the Second.
On the accounting and auditing front, the Commission is suggesting the simplification of disclosure requirements for companies and branches. Such measures would affect the First and Eleventh Company Directives. The First Directive places an obligation on companies to publish certain information, not only on national commercial registers but also on national gazettes. Given the availability of online tools and other possibilities, this obligation may be creating avoidable costs. The Eleventh Directive’s requirements on branch disclosures may be leading to unnecessary costs too, also in relation to the translation of information, and the Commission wishes that these are reduced to a minimum.
The other front that the EU Commission is targeting is that of reducing reporting and auditing requirements for SMEs. Here the Commission makes ample reference to the need for further action from Member States (including combining reporting for different purposes, such as tax, statistics, social security etc) to successfully complement any EU-level initiatives. The EU administration is considering exempting “micro entities” from applying accounting directives, extending transition periods before more detailed accounts would be required, exempting small entities from the obligation to publish their accounts, and letting certain medium-sized enterprises avail themselves of exemptions currently enjoyed by small entities.
Interested stakeholders are being invited to submit their views to DG Internal Market by mid-October. The relevant document is available on http://eur-lex.europa.eu/LexUriServ/site/en/com/2007/com2007_0394en01.pdf
Further information may be obtained from Forum Malta fl-Ewropa on [email protected] or telephone 25909101.
Julian Micallef is Consultation Coordinator at Forum Malta fl-Ewropa
Company Law Directives mentioned:
- First concerned with the disclosure, the power of representation of the organs and the nullity of companies with limited liability.
- Second concerned with the formation of public limited liability companies, minimum capital requirements, distributions to shareholders, and increases and reductions in capital.
- Third concerned with mergers between public limited companies within the same Member State
- Sixth concerned with divisions of public limited liability companies from the same Member State
- Eleventh concerned with the disclosure requirements imposed in a Member State in respect of branches of companies governed by the law of another State |
