4 ms·

I wonder: why EU did not try to somewhat harmonize company law? I can understand that things like tax code, penal code would not benefit from unification across

I wonder: why EU did not try to somewhat harmonize company law? I can understand that things like tax code, penal code would not benefit from unification across disparate societies, but companies seem like a ripe target. This should have begun 20 or so years ago.

throwaway11460 3y ago
Given the domination of Germany and France in EU, thank the universe it didn't. Signed, a citizen of an EU state where you can create a company by digitally signing one form and paying the equivalent of $300.
- _a_a_a_ 3y ago
  Create a company, or do you mean buy it 'off the shelf'?
  - throwaway11460 3y ago
    I mean incorporation of a new company.
- seszett 3y ago
  It's about the same in France by the way, except that it's free.
  - throwaway11460 3y ago
    Cool! My bad assuming without checking.
    - realusername 3y ago
      France is much more digitalized compared to Germany, you can't really put them in the same basket. The issue on the French side is more that they put the exact same excruciating procedures they had in paper online and didn't simplify too much in the process.
- boulos 3y ago
  Example: https://e-estonia.com/solutions/ease_of_doing_business/e-business-register/ https://e-estonia.com/solutions/ease_of_doing_business/e-bus...
- qayxc 3y ago
  > Signed, a citizen of an EU state where you can create a company by digitally signing one form and paying the equivalent of $300. You'd be surprised to hear that you can do that in Germany, too. Costs about 25€ (depends on the municipality) and takes about 30min. The blog post was referring to a very specific form of incorporation. There's not just the ones mentioned in there.
  - throwaway11460 3y ago
    So a normal GmbH, which would be the equivalent of what I'm talking about, can be incorporated online for 25 EUR in 30 minutes? I thought that's what the article is about. What's so specific about the form of incorporation they are talking about? A limited liability company is the most basic form of a corporation... Sole proprietorship / self-employment can be started here for around 20 EUR too, but that's not a company. Or does Germany have some other forms of companies that I don't know?
    - qayxc 3y ago
      > Or does Germany have some other forms of companies that I don't know? There are 9 forms of companies in Germany, only two of which (GmbH and AG [stock corporation/PLC/...]) require fixed capital and a notary.
      - throwaway11460 3y ago
        There are many more in my country too, but they don't offer the liability protection and legal personality that is usually expected of "a company". What other kind of corporation could be used in Germany to do the job of a limited liability company?
- ascorbic 3y ago
  What they should actually do is allow anybody to register a company in any EU state and then operate in any other. Then the member states would have to compete, and Estonia would be the European Delaware. This may be theoretically possible now, but practically it's not so easy.
yau8edq12i 3y ago
Even the USA does not have harmonized company law. Pretty much anything except what concerns the IRS says is in the hand of the individual states. Why would you expect the EU to do so?
- philwelch 3y ago
  Someone in the US can start a Delaware LLC or C corporation without living in Delaware. Can someone living in Germany set up an LLC or corporation in Denmark or Estonia instead of Germany?
  - qayxc 3y ago
    Yes they can. In fact, until about 15 years ago, it was common practise in Germany to found an LLC in the UK and convert it into a GmbH only after it grew big and profitable enough to warrant the effort.
  - tut-urut-utut 3y ago
    Yes, but they would still be a subject of German taxation, which is ridiculously complex and expensive compared to Delaware LLC or an Estonian company run by a person not living in Germany.
cladopa 3y ago
"Harmonizing" is a great name for "absent of competition" or "collusion to raise taxes" and it is the worse thing that could happen to Europe.
lutoma 3y ago
They did try. There's the Societas Europaea, a standardized type of corporation largely governed by EU law. It's primarily used by large multinational companies (Think BASF, SAP, Airbus): https://en.wikipedia.org/wiki/Societas_Europaea https://en.wikipedia.org/wiki/Societas_Europaea That was part of a push to introduce standardized EU-wide legal forms for other types of businesses as well, but the process stalled and never really went anywhere after that.
Rutjjt 3y ago
Why? It would export German "efficiency" into other states.
NoboruWataya 3y ago
Others have mentioned the Societas Europea, which I think is the correct way to do this--provide an option to use a pan-EU legal form. The other way--mandatorily replacing member states' legal forms with one or more pan-EU forms--would simply be too disruptive. You'd be forcing hundreds of thousands, if not millions, of companies to change their legal form. Even if you tried to make the conversion process automatic, there's no one-size-fits-all approach to converting every company that won't end up with some companies automatically adopting constitutions that don't make sense (for example). Some particular aspects of company law are partially harmonised at EU level, for example insolvency law. But that's mostly about ensuring that cross-border insolvencies don't become hopelessly complicated and bogged down through parallel proceedings.

throwaway11460 3y ago

Given the domination of Germany and France in EU, thank the universe it didn't. Signed, a citizen of an EU state where you can create a company by digitally signing one form and paying the equivalent of $300.

_a_a_a_ 3y ago
Create a company, or do you mean buy it 'off the shelf'?
- throwaway11460 3y ago
  I mean incorporation of a new company.
seszett 3y ago
It's about the same in France by the way, except that it's free.
- throwaway11460 3y ago
  Cool! My bad assuming without checking.
  - realusername 3y ago
    France is much more digitalized compared to Germany, you can't really put them in the same basket. The issue on the French side is more that they put the exact same excruciating procedures they had in paper online and didn't simplify too much in the process.
boulos 3y ago
Example: https://e-estonia.com/solutions/ease_of_doing_business/e-business-register/ https://e-estonia.com/solutions/ease_of_doing_business/e-bus...
qayxc 3y ago
> Signed, a citizen of an EU state where you can create a company by digitally signing one form and paying the equivalent of $300. You'd be surprised to hear that you can do that in Germany, too. Costs about 25€ (depends on the municipality) and takes about 30min. The blog post was referring to a very specific form of incorporation. There's not just the ones mentioned in there.
- throwaway11460 3y ago
  So a normal GmbH, which would be the equivalent of what I'm talking about, can be incorporated online for 25 EUR in 30 minutes? I thought that's what the article is about. What's so specific about the form of incorporation they are talking about? A limited liability company is the most basic form of a corporation... Sole proprietorship / self-employment can be started here for around 20 EUR too, but that's not a company. Or does Germany have some other forms of companies that I don't know?
  - qayxc 3y ago
    > Or does Germany have some other forms of companies that I don't know? There are 9 forms of companies in Germany, only two of which (GmbH and AG [stock corporation/PLC/...]) require fixed capital and a notary.
    - throwaway11460 3y ago
      There are many more in my country too, but they don't offer the liability protection and legal personality that is usually expected of "a company". What other kind of corporation could be used in Germany to do the job of a limited liability company?
ascorbic 3y ago
What they should actually do is allow anybody to register a company in any EU state and then operate in any other. Then the member states would have to compete, and Estonia would be the European Delaware. This may be theoretically possible now, but practically it's not so easy.

yau8edq12i 3y ago

Even the USA does not have harmonized company law. Pretty much anything except what concerns the IRS says is in the hand of the individual states. Why would you expect the EU to do so?

philwelch 3y ago
Someone in the US can start a Delaware LLC or C corporation without living in Delaware. Can someone living in Germany set up an LLC or corporation in Denmark or Estonia instead of Germany?
- qayxc 3y ago
  Yes they can. In fact, until about 15 years ago, it was common practise in Germany to found an LLC in the UK and convert it into a GmbH only after it grew big and profitable enough to warrant the effort.
- tut-urut-utut 3y ago
  Yes, but they would still be a subject of German taxation, which is ridiculously complex and expensive compared to Delaware LLC or an Estonian company run by a person not living in Germany.

cladopa 3y ago

"Harmonizing" is a great name for "absent of competition" or "collusion to raise taxes" and it is the worse thing that could happen to Europe.

lutoma 3y ago

They did try. There's the Societas Europaea, a standardized type of corporation largely governed by EU law. It's primarily used by large multinational companies (Think BASF, SAP, Airbus): https://en.wikipedia.org/wiki/Societas_Europaea https://en.wikipedia.org/wiki/Societas_Europaea That was part of a push to introduce standardized EU-wide legal forms for other types of businesses as well, but the process stalled and never really went anywhere after that.

Rutjjt 3y ago

Why? It would export German "efficiency" into other states.

NoboruWataya 3y ago

Others have mentioned the Societas Europea, which I think is the correct way to do this--provide an option to use a pan-EU legal form. The other way--mandatorily replacing member states' legal forms with one or more pan-EU forms--would simply be too disruptive. You'd be forcing hundreds of thousands, if not millions, of companies to change their legal form. Even if you tried to make the conversion process automatic, there's no one-size-fits-all approach to converting every company that won't end up with some companies automatically adopting constitutions that don't make sense (for example). Some particular aspects of company law are partially harmonised at EU level, for example insolvency law. But that's mostly about ensuring that cross-border insolvencies don't become hopelessly complicated and bogged down through parallel proceedings.