The Council of the European Union advanced an optional company framework on Oct. 23, but omitted a central register that startup advocates consider essential to easing cross-border business.
Known as EU Inc., the proposal would offer companies a legal form alongside the laws of the bloc’s 27 member states. The European Commission proposed it March 18 to address the costs and legal uncertainty that differing national rules create for businesses operating across borders.
The Council’s negotiating position retains online registration within two days at a maximum cost of €100. Its text leaves out the Commission’s proposed central digital register and a chapter on insolvency. Those omissions are part of the Council’s position; the final legislation has yet to be decided.
The Council also retained an employee stock option scheme, while limiting its tax provisions to companies with fewer than 750 employees and annual turnover of no more than €150 million when the options are issued. The Commission identified startups, investors and employees receiving options among the intended beneficiaries of the broader proposal.
For the EU–INC founder campaign, the missing register risks leaving the framework divided among national systems. Its website displayed a count of 26,000-plus founders, investors and operators from 27 countries on Oct. 26. Irish Taoiseach Micheál Martin said easier formation and the ability to attract and retain staff would help startups and small and medium-sized enterprises scale up.
Labor groups raised a separate concern. Under the Council’s approach, employee participation rules would generally follow those of the member state where a company’s registered office is located. Governments could choose whether to apply a mechanism addressing participation thresholds reached in another member state. European Trade Union Confederation (ETUC) General Secretary Esther Lynch called the approach “a loophole factory for multinationals,” arguing that it could allow companies to evade workers’ rights.
EU Inc. is not yet law. The European Parliament’s legislative record shows the proposal awaiting a committee decision and lists Nov. 12 as an indicative date for a first-reading plenary session, not a confirmed vote. Negotiations with the Council can begin after Parliament adopts its position.
