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Simplifying the formation of companies in light of Digitalization Directive 2019/1151: an analysis of benefits and risks

In: SMEs in the Digital Era

Author

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  • Umberto Michele Carbonara

Abstract

The Digitalization Directive 2019/1151/EU regulates the online formation of companies, the registration of branches and their legal disclosure. The Directive enhances the formation of new enterprises in the European Union and guarantees transparency to their acts, facilitating economic cooperation between Member States. Its main advantage is its potential for simplification and de-bureaucratization, that would foster the creation of new startups and would benefit SMEs, since the costs of formation are heavier the smaller the size of the new company. However, the Directive also presents problematic areas, such as the control of legality, the standardization of the instrument of constitution, and the involvement of platforms in the online company formation procedure. This chapter tries to find a delicate balance between the positive and the problematic effects of the Directive and draws some conclusions on its efficient implementation and transposition into Member States’ national law.

Suggested Citation

  • Umberto Michele Carbonara, 2023. "Simplifying the formation of companies in light of Digitalization Directive 2019/1151: an analysis of benefits and risks," Chapters, in: Emanuela Carbonara & Maria R. Tagliaventi (ed.), SMEs in the Digital Era, chapter 12, pages 224-242, Edward Elgar Publishing.
    • Handle: RePEc:elg:eechap:21484_12
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