Directive (EU) 2025/25 of the European Parliament and of the Council of 19 December 2024 further expanding and upgrading the use of digital tools and processes in company law

1. Fundamental Principles and Connectivity

• “Once Only” Principle: This will apply to the formation of cross-border subsidiaries and branches. The destination registry obtains the necessary information directly from the source registry through the BRIS system.

The destination registry transfers this information to the notary involved in the company formation.

• Interconnection of Systems: The connection between three key EU networks is strengthened to improve the transparency and accessibility of company information:

    ◦ BRIS (Business Registers Interconnection System): Commercial Registers.

    ◦ BORIS (Beneficial Ownership Registers Interconnection System): Beneficial Ownership Registers.

    ◦ IRI (Insolvency Registers Interconnection): Insolvency Registers.

• Abolition of the Apostille: The need for an apostille is eliminated for registrations and notarial documents (digital powers of attorney for transformations, mergers and demergers, notarial and administrative documents and their certified copies and sworn translations) originating in another EU Member State within the scope of the Directive, both in paper and electronic form.

This exemption applies to documents such as electronic copies and extracts provided by registries, which will be compatible with the European digital identity wallet defined in Regulation (EU) 2024/1183, provided that they are issued in electronic format and authenticated by means of trust services.

2. Preventive Control of Legality and Reliability

• Mandatory Preventive Control: Member States must ensure administrative, judicial or notarial preventive control of the deed of incorporation, articles of association and any amendments thereto, without prejudice to national rules requiring such documents to be recorded in a duly executed public deed (for instance Spain and Germany).

The aim is to ensure that all documents comply with formal, substantive and content requirements before being registered in the Commercial Register, thus ensuring the legality and reliability of corporate information.

• Competent Authority for Prior Legality Control: Control must be exercised by persons holding public office (judges, notaries or administrative authorities); it is not sufficient to be a legal professional to exercise such control, and must refer to:

a) compliance with formal requirements – or the correct use of templates, where applicable;

b) the minimum mandatory content is included;

c) substantive legal requirements are met; and

d) contributions, whether monetary or non-monetary, have been provided for in accordance with national legislation.

• Continuous Legality Control: This extends to the entire life cycle of the company and includes verification of:

    ◦ Identity and legal capacity of the grantors.

    ◦ Legality of the name and corporate purpose.

    ◦ Compliance with formal and substantive requirements.

    ◦It is also clear that dual legality control systems, notarial and registral, such as those in Spain or Germany, are compatible with EU law.

    ◦It is also clear that purely declaratory commercial registers, characteristic of the legal systems of Anglo-Saxon countries, must be adapted to European standards.

    ◦It will therefore be necessary to closely monitor how the Directive is implemented in certain Member States that do not currently meet these standards, bearing in mind that, as stated in Recital 26, this Directive does not imply a general principle of mutual recognition in relation to all documents and information held in national commercial registers.

    ◦The equalisation of the effects of registration publicity, which is the aim of the European legislator, can only be achieved on the basis of real and effective equivalence in the quality of the information accessed in commercial registers.

3. New Harmonised Digital Tools

• EU Registration Certificate: A harmonised EU company registration certificate is created, which will be accepted in all Member States as sufficient proof, at the time of its issue, of the company’s incorporation and of the information contained therein as recorded in the commercial register that issues it (Art. 16 ter).

    ◦ Valid throughout the Union as proof of incorporation and registered information.

    ◦ Includes essential data: name, legal form, registered office, corporate purpose, share capital, status of the company and legal representatives.

    ◦ Available in paper or electronic format, the latter being compatible with the European digital identity wallet, as established in European Regulation 2024/1183.

• European Digital Power of Attorney:

    ◦ Allows cross-border operations (mergers, demergers, establishment of branches, incorporation of companies, registration or closure of branches and transformations) to be carried out in another Member State.

    ◦ It will be accepted in all Member States as proof of the authorised person’s right to represent the company as specified in the document.

    ◦It must be drawn up/granted, amended and revoked in accordance with the legal and formal requirements of the respective national law of origin.

    ◦ At a minimum, verification by a judge, notary or other competent authority of the identity, capacity and legitimacy of the person granting, amending or revoking it on behalf of the company shall be required.

    ◦ It must be compatible with the e-Wallet or electronic purse regulated in the e-IDAS Regulation.

    ◦ A model power of attorney will be developed in the corresponding implementing regulation to be adopted by the Commission within 18 months of the entry into force of the Directive.

4. Transparency and updating of information

• Strict updating deadlines:

    ◦ Companies: They must submit amendments within a maximum of 15 working days.

    ◦ Registers: Changes must be recorded and published within 10 working days.

• Expansion of public data: The information that must be published in the Registers and exchanged/provided through the interconnection system (BRIS) is expanded. Information on groups of companies (accounting consolidation) and the average number of employees must be included.
• Penalties: Effective, proportionate and dissuasive measures are established for those who fail to comply with the reporting deadlines.

5. Implementation and Final Deadlines

• Implementation: Member States have until 31 July 2027 to adapt their legislation (with some technical exceptions until 2028).
• Longer deadline: For commercial registers to make available, through BRIS, free information on the average number of employees and on the parent company of groups of companies, the deadline is extended by one year and one day, until 1 August 2028.

Member States are required to apply the relevant internal rules one year after the end of the implementation deadlines indicated, i.e. from 1 August 2028, except for the aforementioned exceptions, which will apply from 2 August 2029.

• Current challenges: With the new Directive, the process of digitising company law is moving towards an increasingly coherent and integrated legal framework. However, there are still some grey areas due to the complexity of European legislation and insufficient or incorrect implementation by Member States. Furthermore, the practical functioning of the system for interconnecting commercial registers is still far from meeting the requirements of the regulation.

It will therefore be necessary to closely monitor how the Directive is implemented in some Member States that currently do not meet these standards, bearing in mind that, as stated in Recital 26, this Directive does not imply a general principle of mutual recognition in relation to all documents and information existing in national commercial registers.