The Digitalisation Directive II– a Major Expansion and Upgrade of EU Business Registers –

2.1.1. Particulars of company organs

Since the original Publicity Directive, limited liability companies must disclose the “particulars” of the persons who either as body constituted pursuant to law or as members of such body are authorised to represent the company or take part in the administration, supervision or control of the company (“company organs”) (originally: Art. 2(1)(d) Publicity Directive; today: Art. 14(d) CLD). However, it was never defined what exactly these “particulars” include.

DigiD II finally (indirectly) closes this gap. The new Art. 16b(2)(j), Art. 16b(3)(c)-(d) and Art. 18(4) CLD show that in case of natural persons, at least the first name(s) and the surname must be disclosed. Considering the different national traditions as regards the inclusion of the date of birth in the register, the European legislator refrained from requiring also the disclosure of the date of 567abirth; instead, Member States may require the disclosure of “equivalent information”, which allows to unequivocally identify the person (e. g. an ID number) (cf. Art. 16b(2)(j), Art. 18(4) CLD and recital 37 DigiD II).^[16] In case of legal persons, the company name, legal form, EUID (or, where EUID is not applicable, the registration number) must be disclosed (Art. 16b(2)(j), (k), Art. 16b(3)(c)-(d), Art. 18(4) CLD).

2.1.2. Object of the company

The new Art. 14(l) CLD, which was inserted upon the initiative of the EP^[17], requires the disclosure of the object of the company describing its main activity or activities – albeit only where the object is recorded in the national register. With this caveat, the European legislator wants to accommodate the different national traditions. Yet, this diminishes the level of harmonisation and the information available in the national registers and via BRIS. At any rate, many Member States already require disclosure of the object of the company in the national register.^[18]

The object can be expressed using the NACE code^[19], where such code is used for the purposes of the register pursuant to applicable national law. It would be preferable to make the indication of the NACE mandatory, because this would allow to determine the object of the company quickly and easily and without language problems.^[20]

2.1.3. Average number of employees

The new Art. 19(2)(i) CLD, which was also inserted upon the initiative of the EP^[21], requires disclosure of the average number of employees of the company during the financial year – but only via BRIS (not in the national register) and only where national law requires this information to be made available in the 568company’s financial statements^[22] and from the moment this information is available for extraction^[23]. This information is, for example, relevant to determine the size category of a company for accounting purposes.^[24]

2.1.4. Transparency of single-member limited liability companies

DigiD II also enhances the transparency in cases where a company becomes a single-member limited liability company because all its shares come to be held by a single person. Previously, Member States had the choice between three different options of disclosing this fact and the identity of the sole member: record it in the file, enter it into the national register or enter it into a register kept by the company and accessible to the public (Art. 3 SMCD in the version before DigiD II). DigiD II discarded the last option and amended the provision in order to bring the disclosure standards in line with the general disclosure standards: Pursuant to the new Art. 3 SMCD, the fact that the company has become a single-member company, and the identity of the sole member must be recorded in the file or entered into the national register. Furthermore, this information must be publicly available through BRIS and Art. 18, 19(1) CLD apply mutatis mutandis.

2.1.5. Information on branches of third-country limited liability companies

In addition, DigiD II enhanced transparency as regards branches of third-country limited liability companies. They must now also have an EUID (Art. 36(5), 29(4) CLD) and the documents and information which must be disclosed about them in the national register must now also be available via BRIS, much of it even free of charge (Art. 36(3), (4) CLD).

2.2.1. Background and significance

The extension of the register disclosure framework to commercial partnerships by DigiD II is tantamount to a small revolution.^[25] The EU register disclosure framework traditionally covered only limited liability companies, because when the original Publicity Directive was adopted in 1968, the need for harmonisation was felt to be most urgent with respect to them.^[26] In 2019, DigiD I expressly allowed Member States to also make available documents and information for other types of companies (Art. 18(1)2 CLD) – but this was only a Member State option and there was no harmonisation as regards the scope of data to be disclosed.^[27]

Now DigiD II establishes harmonised disclosure standards also for the commercial partnerships listed in Annex IIB CLD and makes their register data available via BRIS. The commercial partnerships listed in Annex IIB include, inter alia, the German Offene Handelsgesellschaft (oHG) and Kommanditgesellschaft (KG), the French société en nom collectif and société en commandite simple, and the Swedish handelsbolag and kommanditbolag. Considering the important role such commercial partnerships play in the economy of the Member States, there is indeed a considerable practical need for such transparency.^[28] However, at least for the time being, the European legislator deliberately refrained from extending the scope of the register publicity framework also to other partnerships or legal entities (e. g. cooperatives) – although the review clause in Art. 3(3)(d) DigiD II expressly mandates an assessment of whether cooperatives should be included. This would indeed be the next logical step.^[29]

2.2.2. Documents and 570information to be disclosed with respect to commercial partnerships

The new Art. 14 a CLD establishes a minimum catalogue of documents and information to be disclosed by the commercial partnerships listed in Annex IIB CLD. By and large, these items correspond with the documents and information to be disclosed by limited liability companies pursuant to Art. 14 CLD.^[30] However, there are also some significant differences.^[31]

It should be noted that, with respect to many items, disclosure is only required where the relevant information is recorded in the national register. In light of the differences between the various national types of commercial partnerships and the different national register traditions, this seems, on the one hand, understandable.^[32] On the other hand, these caveats significantly diminish the level of harmonisation and the information available in the national registers and via BRIS.^[33] Hence, it is welcome that Art. 3(2)(f) DigiD II expressly requires the Commission to assess these caveats in the course of the review of DigiD II.^[34]

Apart from that, the following differences should be highlighted:

1. Pursuant to Art. 14a(c) CLD, in case of commercial partnerships, Member States may require disclosure of an equivalent instead of the registered office. The rationale is that in some national legal systems, commercial partnerships do not have a “registered office” in the proper sense.^[35] In Germany, for example, oHG and KG have only a “Vertragssitz” (“contractual seat”).^[36]

2. In case of commercial partnerships, the instrument of constitution, and the statutes if they are contained in a separate instrument, must only be disclosed if the filing of these documents to the register is required by national law (Art. 14a(f)-(h) CLD). The reason for this caveat is that some national legal systems (e. g. German law^[37]) traditionally do not require the filing of these documents to the register and an agreement on changing this could not be reached.^[38]

3. Since commercial partnerships do not (generally) have a subscribed capital or an administrative, supervisory or control organs, there is no duty to disclose such information.

4. As regards representation, commercial partnerships must disclose the particulars of the partners, directors or other statutory representatives who 571are authorised to represent the partnership in dealings with third parties and in legal proceedings, and information as to whether those persons are authorised to represent the partnership alone or are required to act jointly, or if not applicable, information about the nature and scope of the authorisation of the partners, directors or other representatives to represent the partnership and their particulars (Art. 14a(i) CLD).

5. If there are any general partners who are not authorised to represent the partnership, their particulars must be disclosed, too (Art. 14a(j) CLD).

6. If there are limited partners, their particulars must be disclosed only where they are made publicly available in the national register (Art. 14a(j) CLD). Again, this takes into account the different national traditions.

7. In addition, the maximum amount of liability or contribution of limited partners must be disclosed – albeit, again, only where this information is recorded in the national register (Art. 14a(e) CLD). Considering the different national traditions^[39], it seems sensible to require either disclosure of the maximum amount of liability or of the maximum amount of contribution.^[40] Moreover, the adopted text is a lot clearer and much more appropriate than the requirement in the Commission’s draft to disclose the total amount of the contributions of the partners.^[41]

8. Furthermore, in contrast to limited liability companies, commercial partnerships must only disclose the winding-up, a declaration of nullity, the particulars of the liquidators and their respective powers, and any termination of a liquidation or the fact of striking off, where this information is recorded in the national register (Art. 14a(l)-(o) CLD).

9. Unlike limited liability companies, commercial partnerships need not disclose their object.

2.2.3. Registration and effects of disclosure

Just like for limited liability companies, Member States must now also ensure that a file is opened for each commercial partnership listed in Annex IIB and that such commercial partnerships have an EUID (Art. 16(1) CLD).

Moreover, the established EU standards as regards keeping the documents and information in the file in the register or entering them directly into the register, 572disclosure, effects of disclosure and avoidance of discrepancies between what is in the register and in the file, format of stored information, and access to disclosed information now apply to these commercial partnerships (Art. 16(7) in combination with Art. 16(2)-(6) CLD; Art. 16a(6) in combination with Art. 16(1)-(5) CLD).^[42]

Furthermore, electronic copies of the documents and information referred to in Art. 14 a CLD shall also be made publicly available through BRIS (Art. 18 CLD). Like in case of limited liability companies (cf. Art. 19 CLD), any fees charged for obtaining these documents and this information shall not exceed the administrative costs (Art. 19a(1) CLD) and certain documents and information must be available free of charge through BRIS (Art. 19a(2) CLD).

2.3.1. Background, rationale and overview

EU law has already provided for a certain transparency of groups with the rules on consolidated financial statements in the EU Accounting Directive and on transparency of beneficial ownership in AMLD4^[43]/AMLD6^[44]. However, consolidated financial accounts only provide for ex post transparency, there are numerous exceptions, and neither the EU Accounting Directive nor AMLD4/AMLD6 provide for real transparency of the group structure.^[45] With the new Art. 19 b CLD, DigiD II for the first time requires transparency of groups of companies also via BRIS. This serves the legitimate interests of shareholders, potential investors, creditors, employees, and authorities in having access to information related to the structure of the group to which a company belongs.^[46] The 573availability of this information via BRIS enhances transparency and facilitates access.^[47] Moreover, this makes it possible to automatically link a company to the other group member companies via the EUID.^[48]

Based on preparatory work by the ICLEG^[49], the Commission’s draft had provided to add rather comprehensive information on the group structure as further information to be disclosed, thus integrating group transparency fully into the register disclosure system; moreover, it had provided for a visualisation of the group structure via BRIS.^[50] However, this turned out to be too progressive.^[51] Whereas the Council position wanted to delete these rules entirely^[52], the agreement reached during trilogue negotiations set out a completely new approach^[53].

The new Art. 19 b CLD provides for transparency of the group structure exclusively via BRIS (and not, like the Commission’s draft, also in the national registers).^[54] It covers only groups of companies for which parent companies listed in Annex II or Annex IIB CLD are required to prepare and publish consolidated financial statements (→ 2.3.2) and is based on the basic concept that the information to be disclosed is extracted directly from the financial statements (→ 2.3.4).

2.3.2. Scope

Art. 19 b CLD applies only to groups of companies for which parent companies listed in Annex II or Annex IIB CLD are required to prepare and publish consolidated financial statements in line with Art. 21–29 EU Accounting Directive (Art. 19b(1) CLD). The terms parent company, ultimate parent company, intermediate parent company, subsidiary company, and group are defined in Art. 13a(7)-(11) CLD. Since group transparency pursuant to Art. 19 b CLD is based on the duty to prepare and publish consolidated financial statements pursuant to the EU Accounting Directive, these definitions are aligned with the definitions of parent undertaking, subsidiary undertaking, and group in 574Art. 2(9)-(11) EU Accounting Directive.^[55] Although Art. 13a(7)-(11) CLD do not define the term “control”, it can be assumed that this term means the same as in the context of the EU Accounting Directive.^[56] Considering the alignment of the scope of Art. 19 b CLD with that of the EU Accounting Directive, this is the only sensible interpretation.^[57]

2.3.3. Information to be disclosed

In contrast to the Commission’s draft^[58], Art. 19 b CLD only requires the disclosure of certain “key information” on the companies belonging to the group allowing them to be identified unequivocally.^[59] With this “key information”, market participants can then obtain further information about the individual company and/or the group.^[60]

With respect to the details, Art. 19 b CLD differentiates between companies governed by the law of a Member State and companies governed by the law of a third country.^[61] This has several reasons: Firstly, companies governed by the law of a third country do not have an EUID and may not be entered into a register.^[62] Secondly, only companies governed by the law of a Member State are required to prepare and publish consolidated financial statements pursuant to the national provisions implementing the EU Accounting Directive; therefore, if the ultimate parent company is governed by the law of a third country, the disclosure obligation must be placed on an intermediate parent company (i.e. the highest parent company governed by the law of a Member State^[63]).^[64] Thirdly, Art. 19 b CLD is based on the basic concept that the information is (as far as possible) extracted directly from the consolidated financial statements or from BRIS (→ 2.3.4).^[65] All this also explains the somewhat long-winded phrasing of Art. 19 b CLD.^[66] With respect to subsidiary companies governed by the 575law of a Member State, there is a redundancy, because disclosure of the name and registered office is required twice (once pursuant to Art. 19b(1)(b) CLD in combination with Art. 28(2)(a)(i) EU Accounting Directive and once pursuant to Art. 19b(1)(b) in combination with Art. 19(2)(a)-(c) and Art. 19a(2)(a)-(c) CLD). In practice, it should, of course, be sufficient to disclose this information once.

In addition, Art. 19b(2) CLD contains a Member State option: Each Member State may also require disclosure of the proportion of capital held between the ultimate parent company and each of the subsidiary companies.

2.3.4. Disclosure procedure and updates

Art. 19b(1) CLD only requires Member States to ensure that the information to be disclosed is available free of charge via BRIS.

Since the operative part of the CLD does not stipulate how this information is to be gathered, this is, in principle, left to the individual Member State.^[67] However, as evidenced by recital 20 DigiD II, the European legislator had a very clear perception of how the relevant information should be gathered in a way to avoid new requirements on companies.^[68] If and to the extent to which the information is not already available via BRIS (e. g. the information to be disclosed about subsidiary companies pursuant to Art. 19(2)(a)-(c) and Art. 19a(2)(a)-(c) CLD), the national registers should extract group information directly from the consolidated financial statements.^[69] Given the requirements related to structured data and machine-readable and searchable formats under Art. 3-6 ESEF Regulation^[70], Art. 3 Commission Implementing Regulation (EU) 2023/138^[71] and Art. 16(6) CLD, this will even be possible by automated means in the future.^[72] Hence, the transposition period for Art. 19 b CLD is one year longer.^[73] 576The basic concept to build upon the data already existing in the consolidated financial statements, extract this data automatically and thus avoid any new requirements for companies, is undoubtedly a brilliant idea.^[74] Especially combined with the linking of the individual group member companies via the EUID, this achieves considerably more transparency on groups of companies with relatively little cost for companies and in accordance with the “once-only” principle.^[75]

In addition, Art. 19b(3) CLD establishes a duty to update the information which must be disclosed in line with the new information included in subsequent financial statements. The same must apply mutatis mutandis if the information pursuant to Art. 19(2)(a)-(c) and Art. 19a(2)(a)-(c) CLD changes.

2.3.5. Review clause on visualisation

The Commission’s draft had provided for a visualisation of the group structure through BRIS.^[76] However, it was not possible to reach an agreement on this – probably not least because of the technical challenges.^[77] The general review clause regarding disclosure of group information in Art. 3(3)(c) DigiD II explicitly requires the Commission to assess whether and how the group structure should be visualised through BRIS. It would indeed be desirable to complement the group disclosure framework with a visualisation – ideally, this visualisation should also be generated automatically from the existing data.^[78]

3.3.1. Background, rationale and overview

The level of scrutiny to which the information is subject before being entered into the register correlates with the reliability of registered information: The more intensive the examination, the more reliable the registered information.^[97] While all Member States carry out some kind of ex ante scrutiny of company documents and information before they are entered into the register, the level and intensity of these checks vary significantly.^[98] Consequently, register data from one Member State is often not accepted as evidence in another Member State (this is, for example, a problem especially in Germany, but also in other Member States).^[99]

The origins of this problem can be traced back to the adoption of the 1968 Publicity Directive. In the 1960s, the standards in the then six EEC Member States as regards the formation control of companies were rather heterogene581ous.^[100] In the course of the negotiations on the Publicity Directive, it was therefore only possible to agree on a rudimentary minimum standard, which was laid down in Art. 10 Publicity Directive and then became Art. 10 CLD 2017. According to this provision, Member States had the choice between providing for (i) preventive administrative or judicial control at the time of the formation of the company; or (ii) for the instrument of constitution, the company statutes and any amendments to those documents to be drawn up and certified in due legal form.^[101] Moreover, the provision did not lay down any specific requirements as regards the procedure and intensity of the control or certification; this was deliberately left to national law.^[102]

In 2019, DigiD I for the first time stipulated minimum standards for preventive control; however – at least pursuant to their wording^[103] – they were only mandatory for online formation of limited liability companies listed in Annex IIA (private limited liability companies) and for the online filing of companies listed in Annex II (private and public limited liability companies) (cf. Art. 13g(3)-(5), 13j(4) CLD as amended by DigiD I).

DigiD II not only amends and updates these minimum standards, it also extends their scope of application explicitly to all online and offline filings and all online and offline formations of both limited liability companies listed in Annex II CLD and commercial partnerships listed in Annex IIB CLD.^[104] Moreover, it stipulates mandatory minimum standards for preventive control of the instrument of constitution and the statutes.^[105]

This history also explains the rather complicated system of references, which can be summarised (in a simplified way) as follows:

1. Art. 13g(2)-(5) CLD lay down general rules for the preventive control in case of online formation of limited liability companies; they apply mutatis 582mutandis also to online filings (Art. 13j(4) CLD), offline filings (Art. 13k(2) 1 CLD) and (to a large extent) also to offline formation (Art. 13k(1) CLD) of limited liability companies and commercial partnerships.

2. Art. 10(1)-(3) CLD lay down specific rules for the preventive control of the instrument of constitution and (if they are contained in a separate document) the statutes; they apply both to online and offline formation of limited liability companies and commercial partnerships (Art. 10(4) CLD) and also to online filings (Art. 13j(4) CLD) and offline filings (Art. 13k(2) CLD).

Instead of this complicated referral system, it would have been preferable in the interest of legal clarity to lay down general minimum standards for the preventive control of all filings and complement them with special rules catering to the special features of online formation, offline formation, online filing and offline filing where appropriate.^[106]

3.3.2. General rules for preventive control

As already indicated, DigiD II establishes minimum standards for the preventive control of all (online and offline) formations and filings of all limited liability companies listed in Annex II and all commercial partnerships listed in Annex IIB CLD (Art. 13g(3), 13j(4), 13k(1), (2) 1 CLD). Determining the means and methods for carrying out those controls has been deliberately left largely to the Member States.^[107]

The minimum standard pursuant to Art. 13g(3), 13j(4), 13k(1), (2) 1 CLD consists of checks of the following items:

1. 583legal capacity of the applicant and authority to represent the company/partnership;

2. identity of the applicant^[108];

3. legality of the object of the company/partnership;

4. legality of the name of the company/partnership;

5. appointment of directors.

Of course, the competent authority only has to check the items relevant in the specific case (if, for example, a new director has been appointed and this is filed with the register, it is not necessary to check the legality of the object of the company).^[109]

Art. 13g(4), 13j(4), 13k(1), (2) 1 CLD list three further items that Member States may regulate in the context of the checks: The consequences of the disqualification of a director by the competent authority in any Member State; the role of a notary or any other person or body mandated under national law to deal with any aspect of formation/filing; the exclusion of online formation/filing where the share capital is paid by way of contributions in kind. But this list is not exhaustive (“in particular”); Member States are free – within the limits of the effet utile – to regulate other points.^[110]

Furthermore, Member States shall not make the formation or filing generally conditional upon obtaining a licence or authorisation (Art. 13g(5), 13j(4), 13k(1), (2) 1 CLD).

3.3.3. Special rules for preventive control of the instrument of constitution and the statutes

3.4.1. Background, rationale and overview

To ensure that registers are reliable, it is necessary to not only establish common standards for checking the data, but also that the registers are up to date.^[126] Ultimately, this is also in the companies’ and partnerships’ interests, because 586bona fide third parties may rely on the register and the EUCC.^[127] Hence, Art. 15(1) CLD generally requires Member States to have in place procedures to ensure that the information about companies listed in Annex II and commercial partnerships listed in Annex IIB stored in the registers is kept up to date. Art. 15(2) and (3) CLD then stipulate minimum standards for this. However, in contrast to the Commission’s draft^[128], there is no requirement for companies and commercial partnerships to confirm annually that the information is up to date.

3.4.2. Filing deadline

The first element of the minimum standard is a newly introduced filing deadline (Art. 15(2)(a) CLD): Any changes to the documents and information must be filed to the register within a time period not exceeding 15 working days as from the date the changes were made (sentence 1); but this does not apply to accounting documents referred to in Art. 14(f) and Art. 14a(k) CLD (sentence 2).

3.4.3. Deadline for registration and disclosure

Secondly, all changes in the documents and information regarding companies and commercial partnerships listed Annexes II and IIB CLD must be entered into the register and disclosed within 10 working days from the date of the completion of all formalities required for filing (Art. 15(2)(b) sentence 1 CLD). This deadline for registration and disclosure was first introduced by the BRIS Directive^[129] and was originally 21 days; DigiD II shortened it to 10 working days^[130]. Exceptionally, this deadline may be extended by 5 working days (Art. 15(2)(b) sentence 2 CLD). As examples for such exceptional cases, recital 22 sentence 8 DigiD II mentions the large number of documents filed with the register or unforeseen technical problems.

The deadline starts to run only once all documents and information have been received and all formalities – including the legality check confirming that the documents comply with national law – have been completed.^[131] Thus, the time 587period of 15 working days refers exclusively to the registration and disclosure. By contrast, the CLD does not stipulate a specific time period for the completion of the formalities and especially for the legality check. However, pursuant to recital 22 sentence 7 DigiD II, the formalities should be carried out without undue delay and the company or commercial partnership should be informed about their expected duration.

It should be noted that the general registration and disclosure deadline set out in Art. 15(2)(b) CLD does not apply to accounting documents; for them, Art. 30(1) subparagraph 1, (3) subparagraph 1 EU Accounting Directive are leges speciales.^[132] In addition, there are special rules pertaining to cross-border conversions, mergers and divisions (Art. 86m(7)1, (10), 127(7)1, (10), 160m(7)1, (10) CLD)^[133] and to formations of companies and commercial partnerships (Art. 13g(7), 13k(1) subparagraph 1 CLD).

3.4.4. Consultation of other authorities and registers

Thirdly, registers may consult other relevant authorities or registers within the procedural framework laid down in national law in order to verify specific company information (Art. 15(2)(c) CLD). Other relevant authorities include e. g. tax authorities, trade authorities or the police.

3.4.5. Monitoring of up-to-dateness

Furthermore, the new Art. 15(3) CLD introduced by DigiD II addresses the prevention and removal of registry entries which have become false as well as inactive companies and commercial partnerships.^[134] Member States shall have in place procedures to verify, where doubts exist, whether companies or commercial partnerships registered fulfil the requirements to continue to be registered (Art. 15(3)1 CLD). There must be a possibility to correct the relevant information within a reasonable time period (Art. 15(3)2 CLD). Moreover, the register must be updated when the status of a company or commercial partnership changes (e. g. when it is closed, struck off the register, wound up, dissolved, undergoing insolvency proceedings, economically active or inactive) and – as a last resort^[135] – there must be the possibility that companies and commercial partnerships are struck off from the register (Art. 15(3)2 CLD).

3.5.1. EU Company Certificate (EUCC)

DigiD II introduces an EU Company Certificate (EUCC) which contains all essential information about a company or commercial partnership (Art. 16 b CLD).^[136] This new “identity card” enables companies and commercial partnerships to prove their incorporation/formation and further essential information about themselves quickly and easily within the entire single market.^[137] With the EUCC, the European legislator acts on a suggestion of ICLEG^[138], which in turn builds upon models in national company law (e. g. the French Kbis or the German “aktueller Abdruck (AD)”) and standardised verification documents in other areas of EU law (e. g. the European Certificate of Succession pursuant to the EU Succession Regulation^[139] or the key information document (KID) pursuant to the PRIIPs Regulation^[140]).^[141]

3.5.2. 591Digital EU power of attorney

Since the EUCC indicates only the power of representation of the members of a company’s governing bodies or of a partnership’s statutory representatives, DigiD II also creates a digital EU power of attorney. With this digital EU power of attorney, a person can be authorised to represent a limited liability company listed in Annex II or a partnership listed in Annex IIB CLD in another Member State for purposes of procedures within the scope of the CLD (e. g. formation of a company/partnership; registration or closure of branches; cross-border conversions, mergers, and divisions) (Art. 16c(1) CLD).^[153]

3.5.3. Recognition of copies and extracts from national registers

The CLD as amended by DigiD II still does not provide for an express general rule regarding the recognition of copies and extracts of documents and infor594mation stored in the national registers within the meaning of Art. 16 a CLD. Art. 13g(2)2 CLD only addresses the specific case of online formation of limited liability companies, specifying that electronic copies of documents and information referred to in Art. 16a(4) CLD may be submitted for purposes of online formation – and thus must be recognised.

However, the CLD as amended by DigiD II now expressly provides that Member States may exceptionally refuse to accept copies and extracts from national registers if the requirements laid set out in Art. 16 e CLD (reasonable doubt as to the origin or authenticity)^[170] or Art. 16 f CLD (reasonable doubt as to abuse or fraud)^[171] are met.

Recital 26 sentence 2 DigiD II indeed emphasises that this should not be interpreted as implying a general mutual recognition principle in relation to all information and documents stored in national registers. However, if copies and extracts from the national registers of other Member States do exceptionally not have to be accepted if the requirements set out in Art. 16 e CLD or Art. 16 f CLD are met, this can e contrario only mean that they must be accepted if the requirements set out in Art. 16 e CLD or Art. 16 f CLD are not met.^[172] This is presumably what recital 26 sentence 2 DigiD II (which is only a non-binding recital anyway) ultimately means: copies and extracts from the registers of other Member States do not have to be accepted generally, but only if the exceptions set out in Art. 16 e and Art. 16 f CLD do not apply.^[173]

In fact, Art. 16 e and Art. 16 f CLD ultimately only substantiate the general principles which were already applicable before DigiD II: Naturally no Member State is required to accept register documents and information if they have been falsified or in case of abuse.^[174] At any rate, it is an integral element of the European register disclosure system, that each Member State shall generally recognise the registers of the other Member States and the data disclosed therein.^[175] Furthermore, recital 26 sentence 6 DigiD II highlights that Member States should ensure that different approaches between Member States as to how to carry out the preventive control, or differences in Member States’ legal systems and legal traditions, do not serve as grounds for refusal.

3.5.4. 595Exemption from legalisation and any similar formality

In the past, courts and authorities in some Member States (e. g. Germany) have required a legalisation or apostille for documents from other Member States, which generated costs and delays.^[176] DigiD II has fortunately prohibited requirements of legalisation or similar formality (e. g. an apostille)^[177] for several important documents from other Member States (Art. 16 d CLD). For these documents, the “guarantee of authenticity” which a legalisation or apostille provides, is not necessary, because their authenticity is already ensured by the relevant EU legal framework.^[178]

Firstly, the exemption from legalisation and any similar formality applies to the EUCC, the digital EU power of attorney, and the pre-operation certificates in case of cross-border conversions, mergers, and divisions pursuant to Art. 86n, 127a, 160n CLD (Art. 16d(2) CLD). The authenticity of these “EU documents” is ensured by the relevant provisions of the CLD.^[179]

Secondly, the exemption applies to copies and extracts of documents and information from the register of a Member State (including certified translations) (Art. 16d(1) CLD). However, in case of electronic copies and extracts, this is only the case where they have been authenticated in accordance with Art. 16a(4) CLD, so that their authenticity is ensured. Correspondingly, paper-based copies and extracts must include the date of issuance, the seal or stamp of the register (or an equivalent means), and show a feature (e. g. a unique protocol or identification number) that allows the electronic verification of the origin and authenticity of the document.

Thirdly, the exemption applies to notarial acts, administrative documents, as well as their certified copies and translations issued in a Member State in the context of the procedures of the CLD (Art. 16d(3) CLD). To ensure their authenticity, for electronic documents this requires their authentication by means of trust services referred to in the eIDAS Regulation; for paper-based documents, the same requirements apply like for register documents pursuant to Art. 16d(1) CLD.

3.5.5. 596Restrictions on translation requirements

In cross-border situations, translation requirements often act as barriers. The EUCC and the digital EU power of attorney, which are based on templates available in all official EU languages constitute significant progress in this respect.^[180] Above this, the Commission’s draft had envisaged a comprehensive prohibition of translation requirements.^[181] But this apparently went too far for some Member States.^[182] The new Art. 16 g CLD introduced by DigiD II now only requires Member States to “endeavour” not to require translation of information accessible in the EUCC or via BRIS (Art. 16g(1) CLD) and lays down certain restrictions for translation requirements regarding other documents provided by national registers (Art. 16g(2) CLD).

Pursuant to Art. 16g(1) CLD, Member States shall endeavour not to require a translation of copies or extracts of documents provided by the register from another Member State, when the specific information needed about a company/partnership can be accessed and consulted in the EUCC (lit. a), or through BRIS and is identifiable through explanatory labels referred to in Art. 18 CLD (lit. b). In these situations, a translation is in principle superfluous, because the design of the EUCC and BRIS ensures that language barriers are largely removed. In fact, language barriers may only arise regarding the object of the company; but these could have been solved by requiring the disclosure of the object (also) in English.^[183] Alternatively, the European legislator could have provided for machine translation services (like Art. 7(1)(e) ESAP Regulation^[184])^[185] or a requirement to disclose (additionally) the NACE code. In light of this, it is regrettable that the European legislator has only provided that Member States shall “endeavour” not to require a translation. This should be reconsidered in the context of the review of DigiD II.

Art. 16g(2) CLD sets out restrictions on translation requirements regarding the instrument of constitution, the statutes, and other documents provided by the national registers: When such documents are presented in another Member State, the latter may only require a certified translation when this is justified by 597the purpose for which the document shall be used and is strictly necessary. The examples given are mandatory public disclosure requirements and presentation in judicial proceedings.

Art. 16g(3) CLD clarifies that Art. 16g(1) and (2) CLD are without prejudice to the special language rules laid down in Art. 21 and Art. 32 CLD.

3.5.6. Treatment of (potentially) defective documents

DigiD II for the first time introduced provisions on the treatment of (potentially) defective documents and information from the registers of other Member States. They concern the rectification of manifest errors (Art. 16f(3) CLD, → 3.5.6.1), reasonable doubts as to the origin or authenticity (Art. 16 e CLD, → 3.5.6.2), and reasonable doubts as to abuse or fraud (Art. 16f(1)-(2) CLD, → 3.5.6.3).

3.5.7. Assessment

The comprehensive measures to facilitate proof and mutual recognition of company information constitute an important milestone in the evolution of the EU register and disclosure system. Their implementation will make the professional practice of companies, authorities and stakeholders significantly easier, faster and more efficient.^[210] At the same time, the harmonised standards ensure that the security and reliability of the registers is not only ensured, but significantly improved.^[211]