An EU Corporate Legal Framework by the European Commission. Response of the European Law Institute

The Draghi and Letta reports address the challenges facing European innovative companies as regards scaling up after having attracted initial funding. In order to identify the most significant barriers, the experiences of entrepreneurs and investors are crucial. This Response considers legal fragmentation, cumbersomeregistrationprocessesandlackoffinance as great challenges to European competitiveness. Therefore, this Response focuses on a discussion of possible tools for improving registration with digital tools (III), access for SMEs to finance (IV), and on opportunities of alternative ownership forms (V.1.), such as purpose-oriented enterprises, employee ownership enterprise foundations and steward ownership to enhance European growth and innovation. It also refers to the possibility of making efficient specialised, English-speaking courts responsible for the application of cases concerning the 28th regime (V.2.) and insolvency law (V.3.). Tax law and employment law will not be addressed in this Response, which will also not undertake a detailed examination of the harmonisation of commercial law. In this respect, the valuable work of the Association Henri Capitant should be taken into consideration.1 Many of the suggestions made here have also been advanced by the JURI draft report of the European parliament.2 The 28th regime initiative is intended to simplify business regulation, stimulate entrepreneurship and improve competitiveness for European businesses. However, it could entail both opportunities and risks. An additional legal regime may add additional complexity to the European business environment. The deregulation and liberalisation the initiative aims to achieve is likely to be met by demands for additional safeguards and complicated exceptions (especially in the form of gold-plating) that – while made with the best intentions – may lead to more bureaucracy rather than simplification. This may not only make the 28th regime unattractive but could even unintentionally spill over to national business law through the logic of a level playing field, which would, of course, defeat its whole purpose.