The proposed European company form, known as “EU Inc,” is intconcludeed to build cross-border business clearer. Fewer rules, lower costs, rapider incorporation. Sounds like music to the ears of startups and growing companies. But according to critics, behind that apparent convenience lies a fundamental problem: who holds the power? Investor organizations are sounding the alarm. They fear that shareholders will lose influence in this new structure, particularly at crucial moments such as an IPO.
Less control
Whereas they can currently intervene in cases of mismanagement, that control is at risk of being diluted. According to Eumedion, the proposal strikes at the heart of corporate law. Less control means more leeway for directors to chart their own course—and potentially serve their own interests.
European Commission sees opportunities
The European Commission, however, sees mainly opportunities. A single uniform corporate form would replace the fragmented regulatory jungle within the EU. Companies would then no longer have to navigate national differences. Young companies, in particular, could scale up more quickly within Europe without having to reinvent the wheel every time.
VEB warns: fundamental principles under pressure
But that is precisely where the problem lies, state critics. What works for a startup may not work for a publicly traded company. The Association of Securities Holders (VEB) warns that fundamental principles of the capital market are coming under pressure. Think of fair voting rights and indepconcludeent oversight—pillars that are meant to instill confidence in investors.
Hundreds of thousands of companies
The European Commission is counting on hundreds of thousands of companies to embrace EU Inc. Whether they will also go public en masse remains to be seen. One thing is certain: the promise of simplicity clashes head-on with the fear of losing power.
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