2 Interconnection of business registers
(32556)
7145/11
+ ADDs 1-2
COM(11) 79
| Draft Directive amending Directives 89/666/EEC, 2005/56/EC and 2009/101/EC as regards the interconnection of central, commercial and companies registers
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Legal base | Article 50(2)(g) TFEU; co-decision; QMV
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Document originated | 24 February 2011
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Deposited in Parliament | 3 March 2011
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Department | Business, Innovation and Skills
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Basis of consideration | EM of 15 March 2011
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Previous Committee Report | None, but see footnote
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To be discussed in Council | See para 2.6 below
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Committee's assessment | Politically important
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Committee's decision | Not cleared (see paras 2.7 and 2.8)
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Background
2.1 In their Report[15]
of 9 December 2009, our predecessors drew to the attention of
the House a Commission Green Paper on the interconnection of business
registers. This highlighted the essential role these play in providing
up-to-date and official information on companies, and the fact
that minimum standards are set out in Directive 68/151/EEC (as
amended), including a requirement that Member States must, since
1 January 2007, maintain electronic business registers. However,
it noted that registers operate on a national or regional basis,
and only store information on companies registered in the territory
where they are competent, whereas businesses are increasingly
expanding beyond national borders to take advantage of the single
market.
2.2 In view of this, the Commission suggested that there was
a need to ensure an appropriate degree of transparency and legal
certainty in markets all over the EU, and that the cross-border
cooperation of business registers was essential to achieve this.
It therefore sought in its Green Paper to consider ways in which
this might be achieved in relation to two distinct but related
purposes access to information, and cooperation on cross-border
procedures (involving issues such as mergers, seat transfers,
or insolvency).
The current proposal
2.3 The Commission has now proposed that existing EU legislation
in this area should be amended in the following ways to take into
account the responses it received to the Green Paper:
Directive 89/666/EEC[16]
This Directive requires companies to disclose some data and documents
when they open a branch in another Member State, but the Commission
says that they often fail to update this information. The proposal
would therefore make it mandatory for the register of a branch
to send by electronic means to the register of the parent company
information about any changes to the branch, and it would also
require each branch to have a unique identifier allowing their
unequivocal identification in the European Economic Area.
Directive 2005/56/EC[17]
This Directive addresses cross-border mergers of limited liability
companies, and the proposal would make it clear that business
registries should send each other notifications by electronic
means in cross-border merger procedures. It would also enable
the Commission to specify the technical details in delegated acts
(as provided for in Article 290 of the TFEU).
Directive 2009/101/EC[18]
This Directive coordinates the safeguards which companies are
required to make available for third parties, and includes a provision
providing access to documents and particulars stored on the register.
The current proposal would (i) provide that information should
be up to date, with any changes being notified to the register
within 15 days, (ii) would introduce a unique company identifier
at EU level, and (iii) increase cross-border access to company
information by requiring Member States to make documents, such
as accounts information, legal status, and certificate of registration,
available through a single European platform allowing a search
in all EU business registers.
The Government's view
2.4 In his Explanatory Memorandum of 15 March 2011, the Minister
for Employment Relations, Consumer and Postal Affairs (Mr Edward
Davey) says that the UK recognises the benefits which could arise
from interconnecting registers, and supported such a course in
its response to the Green Paper. He notes that this proposal would
make amendments to existing company law Directives in order to
facilitate the creation of an electronic network, which is in
line with UK policy, but points out that it delegates to the Commission
the power to prescribe technological solutions, making it impossible
at this stage to assess the likely costs.
2.5 In the meantime, he says that, as regards the changes
to Directive 89/666/EEC, Companies House holds the required information
on branches and subsidiaries, and, subject to the detailed technical
requirements, would be able to send information to registries:
in the meantime, it is already working with other Member States
on a European branch disclosure service. As regards the changes
to Directive 2009/101/EC, he says that the first amendment would
have no impact on UK companies as they are already obliged to
notify amendments within 15 days; that the UK already has unique
company indicators at a national level, and is working at a European
level to agree a suitable EU marking; and that it is also working
closely with other Member States on the interconnection of registers
(and will encourage the Commission to build on this work, in order
to keep any costs to a minimum).
2.6 The Minister says that negotiations on the proposal are
due to begin in early April 2011, and that the Hungarian Presidency
hopes to be able to report to the Competitiveness Council in June
2011. However, he adds that, because of the introduction of delegated
legislation, agreement is unlikely until the second half of the
year. He also points out that the proposed amendments would not
in themselves impact on companies or public services, and that
an Impact Assessment will therefore be produced when the detail
of the proposed Delegated Acts is known.
Conclusion
2.7 As we have noted, this proposal stems from the related
Commission Green Paper which our predecessors drew to the attention
of the House in December 2009, and its broad thrust would appear
to be in line with the UK's own approach in this area. Likewise,
the detailed requirements which would be imposed are consistent
with the measures already in place within the UK. Consequently,
it seems to us unlikely that the document will give rise to any
issues requiring further consideration, and that there is therefore
a case for releasing it from scrutiny.
2.8 On the other hand, we have habitually been reluctant
to clear documents before receiving a UK Impact Assessment, and
it is evident that, as things stand, the production of such an
Assessment depends upon the contents of Commission delegated legislation
which in turn cannot be enacted until the draft Directive
has been adopted. We thus face something of a "Catch 22"
situation, and we therefore propose to hold the document under
scrutiny pending receipt of an Impact Assessment, but in the meantime
to leave the Government free to agree the proposal, in accordance
with paragraph 3(b) of the Scrutiny Reserve Resolution, if it
is minded to do so.
15 (31121) 15801/09: see HC 5-iii (2009-10), chapter
9 (9 December 2009). Back
16
OJ No. L.395, 30.12.89, p.36. Back
17
OJ No. L. 310, 25.11.05, p.1. Back
18
OJ No. L.258, 1.10.09, p.11. Back
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