The JURI Committee sets out its vision for a new company form.

Shortly before the summer recess, the rapporteur presented his ideas for a new, uniform legal status for innovative enterprises. The proposal targets small and medium-sized enterprises, start-ups and scale-ups, which currently face very different legal requirements across the Union’s Member States. Through its resolution, the European Parliament seeks to outline a path towards this new legal status, which the incumbent Commission had already announced under the title “28th Regime” at the beginning of its mandate.

One for all!

In his draft report, René Repasi (S&D, DE) recommends the establishment of a company form based on existing national legal forms, which could either be transformed accordingly or serve as the basis for the creation of a new national legal form. This form would have to be recognised and applied in all Member States. A self-standing, pan-European legal form adopted by regulation, he argues, would be doomed to failure, as past experience has shown. By contrast, a directive providing for maximum harmonisation could bring about the “supranationalisation” of essential elements of what would otherwise remain a national legal form. These elements, which mainly concern company law, are not specified in the draft resolution. However, insolvency law has repeatedly been mentioned in the debate.

ESSU – Where are the limits?

The new legal form is to be called ESSU (European Start-up and Scale-up Company) and would exist alongside the respective national legal forms. Its establishment and registration as a legal person should be possible online within 48 hours. A prerequisite for inclusion in a newly created Union-wide digital register is that the company has its registered office in one of the 27 Member States. Listed companies would be excluded. Issues of worker participation would be governed by the law of the Member State in which the ESSU has its registered office. In other words: the ESSU rules are not intended to affect Union or national law in the area of individual or collective labour law.

Do not touch social law!

The same principle should apply to harmonised employee participation schemes: such arrangements must not interfere with the ordinary basic remuneration of workers, nor may they be to the detriment of social security schemes. They can only serve as an additional element to existing social and contractual rights. National rights could be safeguarded through conflict-of-law rules. On this point, the draft report is explicit.

The DSV expressly welcomes Mr Repasi’s position on the protection of social law. After it became known that within the Commission there had been open reflections on regulating not only company law but also labour law – possibly in a separate legal act – concerns arose that the 28th Regime could be used to undermine worker protection. Critics from the start-up community, by contrast, argue that employee protection rules, in particular dismissal protection, are hampering investment in innovative companies.

Next steps

Members of the Legal Affairs Committee (JURI) had the opportunity to submit their amendments to the draft report until 5 September. A vote in committee is currently scheduled for 10 or 11 November, with the Parliament’s plenary expected to consider the matter in December. In parallel, the European Commission is conducting a public consultation for the purpose of an impact assessment, open until 30 September. The Commission intends to present a proposal for a directive in March 2026.