           The current financial crisis highlighted once again the importance of transparency
           across the financial markets. In the context of the measures for financial recovery,
           improving access to up-to-date and official information on companies can be seen as
           a means to restore confidence in the markets all over Europe.

           Business registers play an essential role in this regard; they register, examine and
           store company information, such as information on a company's legal form, its seat,
           capital and legal representatives, and they make this information available to the
           public. They may also offer additional services, which may vary from one country to
           another. The minimum standards of the core services are set by European
           legislation; in particular Member States have to maintain electronic business
           registers since 1 January 2007. Nevertheless, in Europe, business registers operate
           on a national or regional basis: they only store information on companies registered
           in the territory (country or region) where they are competent.

           Businesses increasingly expand beyond national borders using the opportunities
           offered by the Single Market. Cross-border groups as well as a high number of
           restructuring operations, such as mergers and divisions involve companies from
           different Member States of the EU. Furthermore, over the past decade the
           jurisprudence of the European Court of Justice has opened up the possibility for
           businesses to incorporate in one Member State and conduct their business activity
           partly or entirely in another.

           There is an increasing demand for access to information on companies in a cross-border context, either for commercial purposes or to facilitate access to justice.
           However, while official information on companies is easily available in the country
           of their registration, access to the same information from another Member State may
           be hindered by technical or language barriers6. In these circumstances, facilitating
           cross-border access to official and reliable company information for creditors,
           business partners and consumers is necessary to ensure an appropriate degree of
           transparency and legal certainty in the markets all over the EU. To achieve this, the
           cross-border cooperation of business registers is indispensable.

           Moreover, operations such as cross-border mergers or seat transfers and the
           establishment of branches in other Member States have made the day-to-day
           cooperation of national, regional or local authorities and/or business registries a
           necessity. Their close cooperation accelerates procedures and enhances legal
           certainty.

           Efficient cross-border cooperation between the registers is not only essential for a
           smooth functioning of the Single Market. It also significantly reduces the costs for
           companies operating cross-border. The High Level Group of Independent
           Stakeholders on Administrative Burdens identified facilitating cross-border access by
           electronic means to business information as a means of facilitating cross-border
           economic activities. Citing possible savings of  161m regarding certain information
           obligations stemming from the Eleventh Company law Directive (89/666/EEC), the
           experts were fully in support of achieving interoperability between trade registers
           throughout Europe.

           The existing voluntary cooperation between business registries is, however, not
           enough. There is a need for enhanced cooperation between them. There are tools and
           initiatives  such as the European Business Register (EBR), the e-Justice project or
           the Internal Market Information System (IMI)  that can promote the enforcement of
           this legal framework further, facilitate communication between the competent
           registers and enhance transparency and confidence in the market.

           This Green Paper describes the existing framework and considers possible ways
           forward to improve access to information on businesses across the EU and more
           effective application of the company law directives.

           The interconnection of business registers serves two distinct but related purposes:

            Access to information  the network of business registers

           Facilitating access to information on companies across borders increases
           transparency in the Single Market, enhances the protection of shareholders and third
           parties and helps to restore confidence in the markets. Cross-border access to
           information has been promoted significantly by the entry into force of the 2003
           amendment of the First Company law Directive (2003/58/EC) that introduced
           electronic business registers in the Member States as of 1 January 2007. However
           citizens and businesses still have to search in at least 27 registers in order to gather
           the relevant business information on companies. Even if the registers are available
           online, stakeholders have to deal with different languages, search conditions,
           structures. A single access point to business information on all European companies
           could save time and costs for businesses.

           Therefore it is now time to think about the next steps in this process. First and
           foremost, all Member States should participate in the cooperation and in taking
           decisions about its terms and conditions. It should be possible to access reliable
           information on companies in all Member States, preferably in all official languages
           of the EU. It should also be possible to search for information on a company or a
           group of companies active in different Member States without having to access the
           relevant national or regional registers one-by-one. The quality of service should be at
           the same level across the EU.

           The second purpose of the interconnection of business registers is to strengthen
           cooperation in the case of cross-border procedures, such as cross-border mergers,
           seat transfers or insolvency proceedings. Such cross-border cooperation is required
           by several company law instruments.

           Finally, once the Statute for a European Private Company (SPE) is adopted, the number of cases that
           require cross-border cooperation may increase significantly. The SPE could provide small and
           medium-sized enterprises (SMEs) with a simple and flexible instrument to expand their business in
           the Single Market. Therefore, it is necessary to ensure easy access to official information on these
           companies active in several Member States.

           In this regard, competent authorities and/or business registries must be clearly
           identifiable and secure, pre-established channels must be available for the
           communication between them. This would accelerate cross-border procedures and
           increase legal certainty. It would also contribute to the reduction of the
           administrative burden on companies.

           Furthermore, the Eleventh Company law Directive (89/666/EEC) prescribes a list of
           information companies have to register when they create a branch in another
           Member State. However, companies often fail to update this information. This
           omission may have critical consequences in particular when the register of the
           branch is not notified about the dissolution of the company and consequently the
           register provides misleading information to third parties. The business register of the
           branch should therefore be regularly and automatically informed about the more
           relevant changes in the status of the company. Such a change also has the potential to
           reduce filing obligations and thus decrease the administrative burden on companies.

           Enhanced cooperation between business registries could be beneficial regarding
           potential synergies on the disclosure of company information by other bodies. For
           instance, with respect to improving the transparency of financial markets, the
           Transparency Directive contains a number of provisions to ensure that investors
           have access to reliable financial information on issuers whose securities are admitted
           to trading on a regulated market. Inter alia, it requests that such information is kept
           available to the public in the so-called officially appointed mechanisms for the
           central storage of regulated information. The electronic network of such officially
           appointed storage mechanisms has the potential to enhance the availability of
           financial information on listed companies across Europe. In the longer term, a
           single access point to all legal information (stored in the business registers) and
           financial information (stored in the above storage mechanisms) on listed companies
           could be envisaged. Enhanced cooperation between business registries would also
           contribute to an efficient and effective operation of cross-border insolvency
           proceedings, in line with the objective pursued by the Regulation on Insolvency
           Proceedings (1346/2000/EC).

             The need for cross-border cooperation of business registries was identified nearly
             two decades ago, which led to the launching of the so-called European Business
             Register (EBR) initiative. This was voluntary project undertaken by the business
             registries with the support of the European Commission.

             The EBR cooperation has, however, some limitations. Firstly, whilst the informal
             nature of the EBR cooperation has contributed to its flexibility, it has posed
             significant challenges to the expansion of the network which has, in consequence,
             been a lengthy process. Moreover, neither EBR nor the relevant business registries,
             in particular those that are financed from public finances, have access to sufficient
             funds to accelerate the construction of a network covering all Member States.

             Secondly, the EBR cooperation is limited to facilitating cross-border access to
             company information (the first objective outlined in section 2) but does not address
             the issue of registry-to-registry cooperation in cross-border procedures (the second
             objective outlined in section 2). This led some of the EBR partners to launch a
             research initiative, funded largely by the European Commission, to promote
             interconnection between registers (Business Register Interoperability Throughout
             Europe  BRITE). The BRITE project that was completed in March 2009 had as
             its objectives to develop and implement an advanced and innovative interoperability
             model, an ICT service platform and a management instrument for business registers
             to interact across the EU, focusing in particular on the cases of cross-border seat
             transfers, mergers and on the better control of branches of companies registered in
             other Member States.

             However, the BRITE project was a research project and thus its results were only
             implemented in a few countries to test their functionality. Since the end of the project
             phase there has been a discussion between participating Member States about the
             future use of the project results. A forward-looking strategic outline will be presented
             in November 2009 on how to best ensure the maintenance of and regulate the
             responsibility for running the services which were envisaged as a follow-up to the
             BRITE project.

             To the extent that the existing cooperation mechanisms are not sufficient to address
             the enhanced cooperation needs, it is worth exploring other tools and initiatives 
             such as the Internal Market Information System (IMI) or the e-Justice project  that
             can promote the enforcement of this legal framework further and enhance
             transparency in the market.

             The Internal Market Information System (IMI) is an instrument to improve
             administrative cooperation between the Member States so as to improve the
             functioning of the Internal Market legislation. In March 2006, Member States
             endorsed a proposal to develop IMI which, at this stage, is used for the enforcement
             of the Professional Qualifications Directive. It will also support the enforcement of
             the Services Directive from the end of 2009.

           Finally, the aim of the e-Justice initiative is to assist the work of judicial authorities
           or practitioners and facilitate the access of citizens to judicial, legal information.
           Gradually, its scope has been extended since its launch in June 2007 and both the
           Member States and the European Commission attach high priority to its
           implementation. One of the specific projects which should yield tangible results is
           the European e-Justice portal that is intended to be launched online by the turn of the
           year. Once in place, the portal will be the key point of access to legal information,
           legal and administrative institutions, registers, databases and other services within
           the framework of the European justice project.

           The European e-Justice action plan for 2009-2013 deals with the question of the
           integration of the European Business Register in the portal and presents a so-called
           phased approach. In the first phase, already at the launch of e-Justice portal, a link to
           EBR would be provided. In the second, mid- to long-term phase, there should be a
           reflection on the possibility for a partial integration of EBR into the portal itself. The
           details of the second phase require further analysis. However, Member States agreed
           that this further phase should build on the results achieved this far by EBR.

           The options set out in this chapter provide some suggestions on how to address the
           questions explained above. The options require different involvement and
           commitment from the Member States. The Commission invites all interested parties
           to express their views on the considerations below.

           Each of the possible ways forward may need to be accompanied by legislative
           proposals so as to establish a clear legal framework for the cooperation. However,
           the added value of such legislative proposals would need to be assessed through
           impact assessments in accordance with the impact assessment guidelines of the
           Commission.

            To facilitate access to information on companies across borders, a network of
            business registers is needed in which all Member States participate. Whilst building
            on the results already achieved by EBR is reasonable, as there are already 18
            Member States participating in that network, improving its efficiency by regulatory
            means is difficult because of the dominantly private nature of the cooperation.

            The network of business registers only has real added value if it comprises the
            registers of all 27 Member States. A possible way to ensure extensive involvement in
            a network would be to lay down a requirement to connect all business registers in the
            EU, possibly in the First Company law Directive (68/151/EEC). However, Member
            States should be able to decide how this network is set up and what the terms and
            conditions of the cooperation are. It may be useful to create a firmer legal basis for
            some features of the network, but the details of the cooperation should be determined
            through an agreement on the governance of the electronic network of business
            registers ("governance agreement"). The agreement could address issues such as the
            conditions of joining the network including the relation with non-EU members, the
            appointment of a body managing the network, questions of responsibility, funding,
            dispute resolution, etc. The agreement could also deal with the questions of the
            maintenance of the central server and ensuring access to the public in all official
            languages of the EU. The contractual solution also preserves the flexibility of the
            cooperation. Member States would have the possibility to decide to build on the
            already existing results of EBR or to follow a different path. Business registers
            participating in the network should remain free to establish their own pricing policy.
            However, they should not discriminate in their pricing between end users. It should
            be also ensured that the business registers participating in the network abide by
            minimum security and data protection standards, including Community data
            protection rules (95/46/EC) and relevant national provisions.

            The business information accessible through an extended network of registers could
            be also a valuable asset to the e-Justice portal that will be the key point of access to
            legal information and services in the EU. A common strategy and the technical
            details of the relation between the two entities require further analysis, in particular
            the duplication of the work carried out by either the network of registers or the portal
            has to be avoided. In any case, the portal can benefit from the improvement of its
            main source of business information. Independently of the use of a network, there is
            also an option to require all EU business registers to give access to a standardized
            basic set of information directly via the Internet, for instance by providing a
            dedicated and standardized web-service.

            Finally, to facilitate access to information on companies even further, in the longer
            term, the connection of the network of business registers with the electronic network
            set up under the Transparency Directive (2004/109/EC) storing regulated information
            on listed companies could be envisaged. This interconnection could lead to the
            creation of a single access point to all financial and legal information on issuers
            whose securities are admitted to trading on a regulated market and thereby increase
            market transparency.

             - whether an improved network of the business registers of the Member States is
             necessary,

             - whether the details of such a cooperation could be determined by a "governance
             agreement" between the representatives of the Member States and the business
             registries,

             - whether they see any added value in connecting, in the long term, the network of
             business registers to the electronic network set up under the Transparency Directive
             storing regulated information on listed companies.

             If the measures considered above are not judged appropriate, stakeholders are invited
             to explain the benefits of an alternative solution or, as the case may be, of keeping
             the current situation unchanged. Moreover, stakeholders are invited to provide
             evidence of the potential impacts in terms of costs and benefits, including
             simplification and administrative burden reduction, of the above options or the
             alternative solutions proposed.

             There are essentially two options to facilitate the communication between business
             registries in procedures such as cross-border mergers and seat transfers. The first
             option is to use the results of the BRITE project and designate or establish an entity
             that is in charge of maintaining the necessary services extended to all Member States.
             The second option is to use the Internal Market Information System (IMI) that is
             already operational and has the capacity to be extended to new areas of Community
             legislation in the coming years.

             In order to create an efficient support service for the company law directives, it is
             indispensable to find a solution that can be implemented in all Member States. The
             solutions developed in the BRITE project are targeted at the cooperation of business
             registries and ensure a high level of interoperability. The rights of the technological
             solutions, however, belong to the members of the BRITE consortium. Therefore, the
             use of these technologies may only take place on a contractual basis.

             At present, 18 Member States are involved in a cooperation in the context of EBR
             and only six (five Member States and Norway) originally participated in the BRITE
             project and sub-projects, Latvia, Germany (North Rhine-Westphalia) and FYROM
             joining at a later stage. The creation of a network of business registers as mentioned
             above is likely to contribute to the implementation of the results of the BRITE
             project that may otherwise require significant time.

     As regards the costs of this option, since the use of the relevant services remains
     voluntary, the costs of joining and taking part in the cooperation would depend on
     the agreement of the parties.

     Currently, IMI is used by over 1 600 competent authorities in 27 Member States and
     three EEA countries to exchange information under the Professional Qualifications
     Directive (2005/36/EC) and, as a pilot project, the Services Directive (2006/123/EC).

     The advantage of IMI lies in the reusable framework for administrative cooperation
     that it offers. With its competent authority database, its language support and the
     ability to support the creation of structured sets of questions and answers, it can
     potentially support the implementation of any piece of Internal Market legislation.
     Accordingly, an authority only needs to use one system and to be registered in the
     system only once. Depending on its field of competence, it may have access to one or
     more of the legislative areas supported in IMI.

     IMI is not specifically developed for the purposes of communication between
     business registries. However the set of procedures (workflow) for the notifications in
     the context of the company law directives would be the same procedure as it is
     currently used for information requests in relation to professional qualifications and
     services.

     The use of IMI would not require significant investment from the Member States
     other than designating their competent business registries and the persons having
     access rights to IMI.

     The question of branch disclosure needs to be examined separately from cross-border
     mergers and seat transfers. In the case of cross-border mergers and seat transfers the
     need for cooperation between the registries is limited to certain, well-defined steps in
     the procedure. However, in the case of a foreign branch any discrepancies between
     the data contained in the business register of the company and that of the foreign
     branch have to be controlled regularly and automatically. This requires a permanent
     connection and an automated comparative check of the content of the two registers.

     As regards the cooperation of business registries in cases of cross-border mergers
     and seat transfers, the technologies developed in the context of the BRITE project are
     specifically aimed at the cooperation of business registries. If the network of business
     registers gets a firmer legal and contractual basis, the use of the technology, the
     terms and conditions of the BRITE-based cooperation can also be determined by the
     participating Member States.

     Nonetheless, a clear advantage of IMI compared to the other form of cooperation is
     that all Member States of the EU already take part in the system. This cooperation
     covers every Member State and it could therefore be a logical step to extend it to a
     wider range of procedures. The use of IMI should be considered, even as a
     transitional solution, to facilitate cross-border mergers and seat transfers, in
          particular depending on the pace of the expansion of the network and the BRITE-
          based services.

          The lack of automatic notification, however, can be seen as a drawback of the
          Internal Market Information System in some cross-border procedures. While it seems
          suitable and practical to transmit information on cross-border mergers or seat
          transfers, it can hardly be used to substitute an automated check of the status of a
          company and its foreign branch that requires the regular control of a large quantity of
          data.

          Moreover, unlike the Directive for cross-border mergers (2005/56/EC) and the
          Regulations on the SE (2001/2157) and the SCE (2003/1435), the Eleventh Company
          law Directive (89/666/EEC) does not lay down a legal requirement for the relevant
          business registers to cooperate. Consequently, it seems necessary to establish a legal
          basis for such cooperation with respect to foreign branches.

          To conclude, IMI appears to provide a viable means to temporarily or even
          permanently facilitate the communication of business registers in different Member
          States. However, it is not designed for automated data transmission that would be
          required for the enforcement of the Eleventh Company law Directive (89/666/EEC).

          Interested parties are invited to give their views on

          - which solution or a combination of those solutions they favor to facilitate
          communication between business registers in the cases of cross-border mergers and
          seat transfers,

          - whether they support the proposed solution on the disclosure of branches,

          If any of the measures considered above are not judged appropriate, stakeholders are
          invited to explain the benefits of an alternative solution or, as the case may be, of
          keeping the current situation unchanged. Moreover, stakeholders are invited to
          provide evidence of the potential impacts in terms of costs and benefits, including
          simplification and administrative burden reduction, of the above options or the
          alternative solutions proposed.

          Member States, the European Parliament, the European Economic and Social
          Committee and interested parties are invited to submit their views on the suggestions
          set out in this Green Paper with a view of establishing a broad consensus on any
          measures that could be envisaged. Contributions are invited until 31 January 2010. In
          the follow-up to this Green Paper and on the basis of the responses received, the
          Commission will take a decision on the next steps.

          Contributions will be published on the internet. It is important to read the specific
          privacy statement attached to this Green Paper for information on how your personal
          data and contribution will be dealt with.
