The Eu Inc. and the evolution of EU company law

The paper analyses the European Commission’s March 2026 proposal for “EU Inc.”, a harmonised company structure designed for EU start-ups and scale-ups. Existing EU company forms, including the SE, have seen limited uptake due to complexity and fragmented regulation. In 2025, SE entities represented 30% of German DAX firms and 16% of EURO STOXX 50 companies.

Basic concept of the “EU Inc.”

EU Inc. would operate under a common EU framework while remaining partly subject to national company law. The proposal applies digital-only and once-only principles across incorporation, governance and liquidation. Companies could be formed domestically or cross-border and operate under a unified EU identity.

Art. 114 TFEU as the legal basis

The proposal relies on Article 114 TFEU to harmonise company law and improve internal market integration. The paper argues this is more practical than Article 352 TFEU, which requires unanimous Member State approval and contributed to earlier failed proposals.

The law applicable to the EU Inc.

EU Inc. is a hybrid structure combining EU and national law. The authors note this may create legal uncertainty where national courts interpret unresolved matters differently. They recommend stronger clarification of shareholder autonomy and more harmonised judicial interpretation.

Digital EU interface and prospects of a central digital register

The framework introduces a central EU digital interface linked to the Business Registers Interconnection System. Companies could complete registration and filings digitally through either national registers or the EU platform.

Formation

EU Inc. would allow fully digital incorporation using multilingual standardised forms and machine-readable articles of association. Fast-track incorporation could occur within 48 hours at a maximum cost of EUR100. Once-only principles would reduce duplicate filings with tax and social security authorities.

Branches

Branch registration would also follow digital-only and once-only principles to simplify cross-border operations.

Transparency and cross-border use of company data

The proposal expands digital disclosure requirements and interoperability through BRIS, the EUDI Wallet and the proposed EU Business Wallet. Public authorities would retrieve company information directly from registers.

The organisational structure of EU Inc.

The framework prioritises shareholder autonomy and flexible governance. Shareholders may issue binding instructions to directors and tailor governance arrangements through articles of association. The authors recommend clearer drafting to reduce inconsistent national interpretation.

Codetermination (Board level representation of employees)

The paper highlights risks that firms could avoid codetermination by registering in Member States without such rules while operating elsewhere. The authors support linking codetermination to employees’ workplace location.

Digital shares and their transfer

Shares and transfers would exist entirely in digital form through a digital share register. Mandatory notarisation for transfers would generally be prohibited to improve efficiency.

Shareholders’ right of withdrawal

Minority shareholders could withdraw where oppressive conduct occurs, with courts able to require fair-value share purchases.

Financing and capital markets access

EU Inc. would permit non-par value shares, no minimum capital, flexible share classes and broad use of convertible instruments. Companies could access MTFs and, in some cases, regulated markets to support scale-up financing.

Employee stock option plan (EU-ESO)

The proposal introduces harmonised employee stock option plans with minimum 24-month vesting and taxation deferred until share disposal.

Conversions, mergers and divisions

EU Inc. entities could undertake cross-border conversions, mergers and divisions under the Company Law Directive framework.

Liquidation, nullity and insolvency

The proposal introduces digital-only liquidation procedures, including fast-track liquidation for solvent entities and simplified winding-up for insolvent innovative start-ups.

Conclusion

The paper concludes that EU Inc. modernises EU company law through digitalisation, simplified cross-border operations and flexible financing. However, the authors recommend stronger harmonisation and clearer governance rules to improve legal certainty.