Notaries of Europe Alongside Citizens and Businesses

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During this health and economic emergency, Europe’s 45,000 notaries are personally and collectively committed to playing their full role in the community effort to overcome the pandemic and to mitigate as far as possible the significant personal losses that are and will be suffered by large numbers of citizens. This is why they are taking action to ensure that the public service of justice, which is an essential service of general interest, continues to be provided in all territories.

To this end, depending on national situations and in cooperation with their supervisory authorities, measures have been taken to combat the spread of COVID-19 and to continue to provide their services for citizens and businesses. Notaries continue to draw up urgent acts (such as a will for a person in poor health or acts with significant financial consequences) and, as far as possible, less urgent acts, proposing to postpone them where necessary in consultation with clients.

In these difficult times that the European Union is going through, notaries work as responsible professionals, in solidarity with the population as a whole and anxious to contribute, through their work, to supporting the economy. Europe’s notaries perform a function of public authority, which affects both the conditions under which their delegation of public power is exercised and the effects of the acts they draw up. This is why, even in a crisis situation, the notaries of Europe continue to work with the same standards of quality and efficiency, always in strict compliance with the national legal frameworks.

Of course, the economic consequences of the crisis are already being felt in their offices, as legal work is currently experiencing a slowdown. However, they are standing alongside their States and the European institutions to face the current and future challenges. They will continue to provide certainty for legal transactions on behalf of States, citizens and businesses.

The Notaries of Europe are ready for more digitalization in company law

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On 25 April 2018, the European Commission published two legislative proposals for European company law as part of its EU Company law upgraded Package. The proposals promote digital solutions throughout a company’s lifecycle and establish a comprehensive legal framework for cross-border transformations, introducing for the first time European rules on cross-border conversions and divisions.

The Notaries of Europe welcome the European Commission’s general approach to implement digitalization in company law without disruption by allowing Member States to build upon already existing, well-established systems of preventive control also in the digital age.

The Notaries of Europe appreciate that the proposal for a directive on digital tools in company law expressly recognizes the role of the notary to guarantee legal certainty and to prevent abuse in company law in today’s increasingly digitalized world. Notaries provide comprehensive legal advice and carry out a preventive legal control throughout a company’s lifecycle which ensures that companies are effectively set up, that their articles of association are tailored to the specific needs and requests of the founders and that subsequent structural changes during a company’s lifecycle are legally valid. Furthermore, the reliable identification of shareholders and directors by the notary allows businesses as well as governmental authorities to efficiently and reliably determine who stands behind a company and who can represent it in relation to third parties. In consequence, the data and information filed by the notary with the company register and displayed there for public information is reliable and can therefore be vested with public faith. At the same time, the abuse of corporate entities for illegal purposes such as money laundering and tax evasion is effectively prevented.

Dr. Marius Kohler, president du CNUE, states :

Building upon electronic procedures already in place for the interaction between notaries and company registers in many Member States, the Notaries of Europe are ready to perform their tasks also by digital means and will take the necessary steps to allow the fully online incorporation and registration of limited liability companies.

The Notaries of Europe believe that the European Commission’s proposal on cross-border mobility will make it easier for European companies to merge, divide or transfer their registered office across national borders within the EU, provided that the operation is not artificial or abusive and that the interests of stakeholders (shareholders, creditors and employees) are sufficiently protected. The Notaries of Europe therefore welcome that the proposal expressly aims at promoting cross-border mobility of companies for genuine business purposes whilst, at the same time, calling for strong safeguards to protect the rights and interests of shareholders, creditors and employees. C.N.U.E will thoroughly analyze now whether the proposed safeguards are sufficiently waterproof or whether they still have loopholes that need to be closed by the European legislator during the legislative process.

Dr. Marius Kohler, president du CNUE, concludes :

We feel that the European Commission’s proposals on company law offer a good starting point to adapt company law to the needs of businesses, consumers and governmental authorities in today’s increasingly digitalized world. We look forward to a constructive dialogue between the stakeholders and the European institutions in the upcoming legislative process to reach the best solutions for European citizens and enterprises.