EU’s company-law plans ‘highly ambitious’
An expert in company law has told a Law Society conference that the European Commission’s target to announce plans for an EU-wide company-law regime in the first quarter of next year are “highly ambitious”.
Professor Deirdre Ahern of Trinity College Dublin was speaking at the Business Law Conference 2025 held last week (5 November).
She was referring to the proposed 28th Company Law Regime, a ‘stand-alone’ system that firms could choose instead of the 27 systems operating in the member states.
Aimed at start-ups and ‘innovative’ companies, possible features include €1 minimum capital and template articles to reduce costs.
‘New momentum’ on competitiveness
Prof Ahern told the conference that previous attempts to introduce such a system had failed, as member states jealously guarded their own company-law regimes.
She said, however, that there was a new momentum on competitiveness in the EU, and last year’s Draghi report on the issue had included a call for a voluntary, opt-in 28th company rulebook.
“Compared with what we've seen earlier, today's scale of ambition in relation to regulation is totally unparalleled to anything we've seen before, because it's part of the entire mission of the current commission,” Prof Ahern stated.
The academic said that commission president Ursula von der Leyen wanted to remove what were seen as unnecessary barriers to doing business in the EU and noted that the proposal on the new voluntary system, sometimes known as ‘EU Inc’, had been included in the institution’s work programme for the first quarter of 2026.
Work on this will be the responsibility of Ireland’s commissioner Michael McGrath.
Timeline concerns
Prof Ahern warned, however, that key aspects of the design for the plan were “far from set in stone”, while company-law experts had expressed concerns about the ambitiousness of the timeline.
She said that it could be difficult to deliver such a plan “in one go”, adding that it could take the form of a directive, rather than a regulation, and it could be introduced in steps.
Prof Ahern told the event that it would be difficult to introduce a supra-national form for companies, and that she expected a fragmented approach, with every member state creating their own version of the form that would be recognised in all the others.
She also told the conference that regulatory arbitrage and competition between member states was likely if 27 versions of the 28th company form were available.
Shift to east in EU
Mason Hayes & Curran partner Justin McKenna said that he shared Prof Ahern’s reservations about the complexity and ambition of the proposal – particularly the intention to include issues such as insolvency, tax, and employment – but added that “something was coming”.
McKenna pointed to a shift to the east within the EU post-Brexit. Many eastern European company-law regimes were seen as “clunky”, he said, leading to a desire in the region for more user-friendly systems.
He told the conference that he believed a simplified EU system, once adopted, could gradually become a default option for start-up companies across Europe.
Submissions
The lawyer, who was involved in CCBE and Law Society submissions to the commission on the issue, said that both organisations had urged a focus on simplifying company formation and operation, and had advised caution on attempts to harmonise other areas, such as taxation, employment, or solvency laws.
He told the conference that the definition of an ‘innovative’ company had not been settled, and that both submissions had argued that any new system should not be too restrictive.
McKenna told the event that the Law Society had emphasised that it did not want something imposed that was worse than the solutions already available in Ireland – he described the Irish LTD form of private company limited by shares as “perfectly flexible already”.