Law Implementing the EU Guideline Concerning the Combination of Central-, Commercial- and Company Registers

With a 6-month delay, the German legislator implemented the EU guideline on the Europe-wide combination of company registers effective on 31 December 2014 (Federal Law Gazette (Bundesgesetzblatt  - “BGBl”) 2014 Para I, No. 63 of 30 December 2014, P. 2409 et seq.). The goal is to simplify and improve access to company information, both for the public and for the competent bodies maintaining the registers. For this purpose, stock corporations from the entire EU will receive a uniform European identification in the future.

Background

As the European internal market continues to merge, register queries play an increasing role in all EU countries. Guideline 2012/17/EU aims at improving cross-border access to company information by networking the national registers. While the national registers of the individual member states will continue to exist, they will additionally be linked via a shared access to make them more easily accessible. Due to significant differences in register standards within the member states in terms of publicity effects, verification of correctness and identity verification, a central European commercial register is not planned.

Main Content of the Implementation

The new regulations only cover stock corporations and their branches. Private companies (particularly general partnerships (offene Handelsgesellschaft – “oHG”) and limited partnerships (Kommanditgesellschaft – “KG”)), associations and co-operatives are not affected.

Entries into the commercial register and the applicable documents, as well as entries into the company register, will be accessible not only via the national registers, but also via the European Justice Portal (https://e-justice.europa.eu) in future . Pursuant to section 9b Para. 2  of the German Commercial Code (Handelsgesetzbuch – “HGB”), information about insolvency proceedings, deletion, dissolution, liquidation, processing or settlement of the company, as well as mergers which come into effect pursuant to section 122a of the German Transformation Act (Umwandlungsgesetz – “UmwG”) will be transmitted to the central European platform. Furthermore, a Europe-wide unique ID will be assigned to each stock corporation and its branches in addition to the previous HRB number under the German commercial register.

The Implementation Act does not specify any details. The Federal Ministry of Justice is authorised to enact a legal regulation to specify details regarding the unique European ID and data transmission. Initially, however, the precise technical design of the European Justice portal and the central European platform installed by the committee remains to be seen, so that compatibility and interoperability are guaranteed from the outset. The system is expected to be completed in 2017.

In addition, the Implementation Act contains the following regulation which serves to accelerate register proceedings: According to the commercial register regulations, changes to facts which are subject to registration must be entered and disclosed no later than 21 days following the receipt and verification of all required documentation. This 21-day deadline is usually not exceeded in German practice and should therefore not represent a challenge for most commercial registers.

Comment

The guideline and the Implementation Act aim at desirable goals, including greater legal certainty in cross-border business due to reliable, easily obtainable information about stock corporations, the creation of secure general conditions for trade within Europe, provision of reliable, necessary information for agreements with foreign companies or court proceedings (company, domicile, summonable address, person and signing authority of the legal representatives). While it was thus far necessary to register on the sites of the respective foreign commercial registers and know their (specialised) language, the route via the central European platform and the European Justice Portal should be sufficient in the future. It is maintained in all official languages, and will also contain information about the extent of public faith (öffentlicher Glaube) in the applicable national register. Unfortunately, the network of European registers only covers capital companies and not private companies.

Registration requirements for the companies remain unaffected by the guideline, which primarily serves to link the registers. National registers will remain responsible for registrations. The European company IDs serve solely for internal communications between the registers, and not for use in legal relations. The national commercial register number will continue to be the only number which must be provided in business transactions.