The European single market constitutes an enormous space for trade and financial opportunities for companies and individuals, which is becoming ever more important and therefore, national companies are in search of opportunities beyond its borders. An example of this are cross-border Mergers and Acquisitions (M&A), which aim to increase turnover by way of the incorporation of companies who have their headquarters in other Member States.

Each European Union country has its own commercial registry wherein domestic companies are registered and where their principal corporate characteristics and modifications are recorded. This registry, which at national level constitutes a very useful tool facilitating information, protection and legal security for the internal market, gives rise to important linguistic and operational difficulties at intercommunity level in the consultation of information on companies incorporated in any other European Union member country. Thus it has become necessary to unify and coordinate the registries in order to contribute to creating a European area of security and justice, while at the same time, responding to the demand for access to information relative to companies in a cross-border context.

¿What information systems exist at community level for consulting data on companies incorporated in any of the EU countries?

The community directive 2012/17 provided for the creation of an interconnection system for the commercial registries of the European Union, known as the Business Registers Interconnection System – BRIS. Likewise, the EU Commission Implementation Regulation 2015/884 of 8th June 2015 established the specifications and technical procedures for the interconnection system of the national registers.

The BRIS is currently at the technical test stage and it is expected that it shall start operation in June 2017.

This system shall have two main functions:

(a) Offer access to data on registered companies in member countries, in all of the European Union.

(b) Allow electronic communication between all of the EU commercial registries, which will allow the exchange of information regarding foreign branches and subsidiaries.

¿What are the benefits for individuals and for the market?

  • It shall allow investigation into the characteristics and the situation of companies in the EU when performing preliminary searches for M&A, Joint-Venture or commercial agreement operations.
  • It is a means by which national authorities may exchange information, being able to cross check the data bases of the registers of the member countries.
  • It shall allow the monitoring and analysis of groups of companies with a view to possible intercommunity M&A operations.
  • It protects the interests of shareholders, and also those of third parties, suppliers, creditors, clients, etc.
  • It brings transparency to the market and facilitates possible cross-border operations.
  • It shall contribute to removing from the market those companies who do not comply with national registration requirements.

As a complement to the above system, another source of information is the European Business Register (EBR) which consists of a cooperation network of European commercial registries which exchange information. The EBR is open to the use of individuals and companies through subscription via the commercial registry of their own country and allows cross-border access to information regarding registered companies in the European Union which form part of the EBR network.

The third source of cross-border corporate information, which would be of great value in lending security to commercial traffic in the single market, is the insolvency registry. At the moment, an insolvency registry exists, consisting of a data base, which allows the gathering of information on insolvency procedures and includes 8 countries of the European Union: Austria, Germany, Czech Republic, Estonia, Latvia, Netherlands, Romania and Slovenia. The efficacy of this registry is still relative given its geographical limitation. The EU Regulation 2015/7848 imposed the obligation upon the Member States to establish national insolvency registers. However, even if all of the Member States were to have an Insolvency Register it would not be sufficient, for the same reason commented in the case of company registry information, given that an interconnection system between registries would still be required. In other words, so that there is a broad and efficient application of the systems, the interconnection of the national registries is anticipated via the European E-Justice Portal, as a centralised point of access to all of the information in the system, even if Spain, as well as other member countries, is working towards the integration of its national data bases into this community system, in order to comply with the aforementioned Community Regulation. Said integration must be completed no later than 26th June 2018.

 

 

Eduardo Vilá

Vilá Abogados

 

For more information, please contact:

va@vila.es

 

10th March 2017