Opinion of the European Economic and Social Committee on the Proposal for a Directive of the European Parliament and of the Council amending Council Directives 68/151/EEC and 89/666/EEC as regards publication and translation obligations of certain types of companies COM(2008) 194 final — 2008/0083 (COD)
Date: 2008-09-18
Institutions: European Economic and Social Committee
Subjects: ESC opinion, auditing, branch, business management, company law, organisation, publication of accounts

31.3.2009

EN

Official Journal of the European Union

C 77/35

Opinion of the European Economic and Social Committee on the ‘Proposal for a Directive of the
European Parliament and of the Council amending Council Directives 68/151/EEC and 89/666/EEC
as regards publication and translation obligations of certain types of companies’

COM(2008) 194 final — 2008/0083 (COD)

(2009/C 77/06)

On 23 May 2008 the Council decided to consult the European Economic and Social Committee on the

Proposal for a Directive of the European Parliament and of the Council amending Council Directives 68/151/EEC and
89/666/EEC as regards publication and translation obligations of certain types of companies.

On 21 April 2008 the Committee Bureau instructed the Section for the Single Market, Production and
Consumption to prepare the Committee's work on the subject.

Given the urgent nature of the work, the European Economic and Social Committee appointed Mr Iozia as
its 447th plenary session, held on 17 and 18 September 2008 (meeting of
rapporteur-general at
18 September), and adopted the following opinion with 71 votes in favour and one abstention.

1. Conclusions and recommendations

1.1
The Committee approves of the content of the proposed
directive and considers it a further step forward in the adminis-
trative simplification strategy, as envisaged in the communica-
tion on A strategic review of Better Regulation in the European
Union.

1.2
This follows the positive view taken by the EESC's Single
Market Observatory, which in several opinions has consistently
supported the various simplification initiatives undertaken in
the field of company law. It believes that by cutting costs for
companies, these initiatives make an important contribution to
the competitiveness of EU firms, as long as they do not under-
mine the protection of other stakeholders' interests.

that

The Committee points out

1.3
the proposal under
review to amend Directives 68/151/EEC (First Company law
Directive) and 89/666/EEC (Eleventh Company law Directive) is
aimed at simplifying and reducing administrative burdens in the
sensitive area of publication and translation obligations for
certain types of companies that are often burdened by dispro-
portionate and sometimes unnecessary costs.

1.4
The Committee supports the proposed measures, achiev-
able through minor changes to the EU acquis, which — as well
as cutting administrative burdens for companies, as demon-
strated in the accompanying impact assessment — will prevent
the emergence within the EU of unjustified barriers to the free
movement of goods and services.

The Committee therefore welcomes such intervention
1.5
and joins with the Council
in calling on the Commission to
propose further measures to reduce other remaining unneces-
sary obligations in other areas which, without providing any
added value to users, are a burden to companies and reduce
their capacity to respond to the current challenges posed by
global competition.

The Committee

1.6
the Commission
recommends
encourage the Member States to pursue administrative simplifi-
cation for business by transferring online all information that is
required to be published under existing legislation.

that

2. Background

2.1
After launching a series of assessments in 2005, the
Commission embarked on a simplification drive to reduce
administrative costs and burdens on companies deriving from
existing legislation, taking the view that unnecessary costs were
hampering economic activity in the EU and damaging the
competitiveness of businesses.

2.2
On 14 November 2006, the Commission presented a
communication with the significant title of Better Regulation in
the European Union (1) and a working document on Measuring
administrative
in the
European Union (2). Both initiatives stress the need to pursue
tangible economic benefits for companies where simplification
is possible without adverse effect on the users of the informa-
tion concerned.

costs and reducing administrative burdens

2.3
In March 2007, this strategy was backed up by an action
programme aimed at reducing administrative burdens (3) (not
yet published in the Official Journal), which set the target of a
25 % cost reduction by 2012.

(1) A strategic review of Better Regulation in the European Union,

COM(2006) 689 final, OJ C 78, 11.4.2007, p. 9.

(2) Measuring administrative costs and reducing administrative burdens in

the European Union, COM(2006) 691 final.

(3) Action programme for reducing administrative burdens in the EU,

COM(2007) 23 final.

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Official Journal of the European Union

31.3.2009

2.4
A number of fast-track proposals were adopted by the
Commission in March 2007 aimed at reducing administrative
burdens and on 10 July 2007 it presented a communication
its proposals for simplification in the fields of
setting out
company law, accounting and auditing (4).

At its meeting of 13 and 14 March 2008, the European
2.5
Council called on the Commission to continue identifying new
burden-cutting legislative proposals (5).

2.6
This is the background to the proposed directive on
publication and translation obligations in the field of company
law, which provides for the reduction and/or removal of infor-
mation obligations that provide no added value for users.

3. The Commission proposal

The aim of

the proposed directive, according to the
3.1
Commission, is to enhance the competitiveness of EU compa-
nies by reducing and/or removing the administrative obligations
laid down under existing legislation that do not meet
the
the resulting information and
requirements of
represent unnecessary additional costs for companies.

the users of

The proposal involves amending Directives 68/151/EEC
3.2
(First Directive) and 89/666/EEC (Eleventh Directive), as regards
the publication and translation obligations arising from the
establishment of certain types of company.

3.3 With regard to the First Directive, a new minimum publi-
cation requirement is to be set with regard to what is currently
contained in Article 3(4) of Directive 68/151/EEC on company
law. The proposed amendment to the article is aimed at elimi-
nating some of the current obligations to publish in national
gazettes information on the company's foundation as well as
the annual accounts, which under the current legislation have to
be published on a yearly basis.

3.4
The proposed simplification by no means reduces the
added value for users, particularly now that the information
through which Member
registers,
contained in commercial
States are required to provide the necessary information,
is
increasingly available online as the use of electronic means
becomes more common.

prescribe the use of additional means of publication, provided
that this does not lead to additional costs for companies.

3.6
As regards Directive 89/666/EEC (Eleventh Directive) on
company law, an amendment is envisaged to Article 4, which
currently requires the translation of all documents in the
company file upon registration of a new branch.

language of

The new Article 4 requires that

the documents are
3.7
published in an official
the Community but
considers it sufficient that the translations be certified in a
procedure accepted by the authorities of any Member State. All
Member States are to accept this attestation and are not to
impose any formal requirement other than those laid down in
paragraphs 1 and 2,
in keeping with the aim of minimising
translation and certification costs.

3.8
The legal basis for the proposal remains the same as for
the previous directives: Article 44(2)(g) of the Treaty. Further-
more, the Commission deems it in line with the principles of
subsidiarity and proportionality.

that

The Commission points out

3.9
the proposal and
impact assessment have stood up to the scrutiny of a very broad
representation of stakeholders (110 in total from 22 Member
States). The positive findings are available on the website of the
Directorate-General
Services
(DG MARKT).

Internal Market

and

for

3.10
In its impact assessment, the Commission estimated
that around EUR 410 million per year would be saved on the
publication of annual accounts and about EUR 200 m per year
on the publication of amendments to registers. Approximately
EUR 22 m would be saved on translation and certification.

4. General comments

Through several opinions drawn up by the Single Market
4.1
Observatory, the Committee has expressed its support for the
administrative simplification drive envisaged under the Strategic
review of Better Regulation in the European Union.

3.5 Member States are required to provide for an electronic
chronological access to the information, but remain free to

(4) A simplified business environment for companies in the areas of

company law, accounting and auditing, COM(2007) 394 final.

(5) Conclusions of the Presidency of the European Council, Brussels,

13 and 14 March 2008, doc. 7652/08, (concl. 1).

4.2
The Committee's opinions have fully supported this
drive, which is making a practical contribution to the competi-
tiveness of EU companies by cutting their costs — which in the
field of company law seem largely redundant and excessive —
without undermining the protection of other
stakeholders'
interests.

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C 77/37

4.3
The Committee points out that by intervening in such
sensitive areas as publication and translation obligations, this
proposal not only significantly reduces costs, as demonstrated in
the impact assessment, but also increases the credibility of the
EU by removing all possible temptation to raise artificial unjusti-
fied barriers to the free movement of goods and services.

It notes

4.4
launched to date have
followed careful assessment of the intended objectives and of
the fundamental principles of subsidiarity and proportionality

the initiatives

that

Brussels, 18 September 2008.

and have also been subject to the prior in-depth consultation of
all stakeholders.

The Committee therefore approves of the content of the
4.5
proposed directive, considering it a welcome step forward
within the broader simplification strategy. It also fully backs the
Council
in calling on the Commission to intervene in other
areas and fields in which there is also a need for simplification
that continue to burden
to reduce the many obligations
companies.

The President

of the European Economic and Social Committee

Dimitris DIMITRIADIS

Opinion of the European Economic and Social Committee on the ‘Proposal for a Directive of the
European Parliament and of the Council amending Council Directives 78/660/EEC and 83/349/EEC
as regards certain disclosure requirements for medium-sized companies and obligation to draw up
consolidated accounts’

COM(2008) 195 final — 2008/0084 (COD)

(2009/C 77/07)

On 23 May 2008 the Council decided to consult the European Economic and Social Committee, under
Article 44(1) of the Treaty establishing the European Community, on the

Proposal for a Directive of the European Parliament and of the Council amending Council Directives 78/660/EEC and
83/349/EEC as regards certain disclosure requirements for medium-sized companies and obligation to draw up consoli-
dated accounts.

On 21 April 2008 the Committee Bureau instructed the Section for Single Market, Production and
Consumption to prepare the Committee's work on the subject.

Given the urgent nature of the work, the European Economic and Social Committee, in accordance with
Rules 20 and 57(1) of
the Rules of Procedure, appointed Mr Cappellini as rapporteur-general at its
447th plenary session, held on 18 September 2008, and adopted the following opinion by 59 votes to one.

1. Conclusions and recommendations

The EESC welcomes that the exemptions foreseen for
1.1
small companies
in the 4th Company Law Directive are
extended to medium-sized companies as they lead to a reduc-
tion of reporting burden for those companies.

1.2
The EESC also welcomes the proposed changes to the
7th Directive as they simply clarify the interaction between
consolidated rules set out in this Directive and in the Interna-
tional Financial Reporting Standards.

The EESC especially appreciates that

1.3
the objective of
simplifying financial reporting is respected: there is no signifi-
cant loss of information for users of accounts, and other stake-
holders are basically not affected. The proposed simplification is
based on the needs of SMEs and users of financial information.

1.4
To date there has been a lack of research and supporting
evidence to determine the needs of users, which may vary
across EU Member States. Before introducing further changes to
financial requirements for SMEs, the current position in terms
of uptake of options under the 4th and the 7th Directives
should be considered. This investigation should include (a) use
of existing options,
(b) motives cited by Member States to
explain their choice of options and (c) a review of Member
States' success in meeting their objectives.

1.5
The EESC therefore recommends that research in this
area should be undertaken as a basis for rational policy propo-
sals in the future.