Brussels, 11th July 2007
Public limited liability companies will no longer have to order costly expert reports in cases of mergers and divisions, unless there is a demand for such reports among shareholders. After a three months fast track procedure, the European Parliament today accepted a Commission proposal for removing unnecessary burdens on small businesses. The proposal is one of a package of ten ‘fast track actions’ presented by the Commission only a few months ago to cut red tape (see IP/07/294) and now awaits agreement by the Member States. This package contains the first examples of pure reduction proposals, for instance when it comes to information obligations, to be agreed in a fast and efficient procedure by the legislators.
Commission Vice President Günter Verheugen, responsible for enterprise and industry policy, said: “This is a landmark case for better regulation. Today we set a new precedent for removing red tape at high speed in the EU. It is a good example of unnecessary burdens that could and should be removed very quickly. But we will not rest until we reach our target of reducing the burdens by 25% in 2012. More fast track actions will be tabled soon.”
Internal market and services Commissioner Charlie McCreevy said: "This shows that Commission, Council and Parliament can work together to cut red tape quickly. It bodes well for future work on removing unnecessary burdens and making life easier for EU businesses."
Today’s proposal potentially applies to more than 600.000 public limited liability companies across Europe, and in particular to those owned by a limited number of shareholders. The current obligation was meant to inform shareholders of the draft terms of mergers or divisions, but it is considered needless paperwork when shareholders have no interest in the costly reports. This is often the case for Small- and Medium-Sized Enterprises (SMEs) where shareholders take an active part in the day-to-day management of the business.
It is estimated that the average cost of commissioning such an expert report amounts to roughly 3.500 EUR. This is obviously not a trivial figure for SMEs that have identified the requirement as a bureaucratic burden. However, today’s proposal also ensures that, if shareholders still see a need for the expert report, they will continue receiving them.
To identify further reduction possibilities, the Commission is currently
embarking on a large-scale measurement exercise. The aim is to identify
further onerous requirements that can be scrapped or adjusted to better suit
their objective without burdening business. Following today’s positive
results, the Commission expects to continue presenting fast track actions along