With the Digitalisation Directive (EU) 2019/1151, many regulations have been made regarding company law to increase digital applications. The main purpose of the directive is to facilitate the formation and registration of companies within the borders of the EU by enabling the use of digital tools and methods in the field of company law. In particular, the aim is to reduce the cost of incorporating start-ups and small- and medium-sized businesses as well as their time and administrative burdens. The EU member state of Germany recently passed Gesetz zur Umsetzung der Digitalisierungsrichtlinie [Law Implementing the Digitalization Directive, or DiRUG] in order to transpose the directive’s provisions into national law and entered into force on August 1, 2022.

The directive requires member states to ensure that the online formation of limited liability companies with cash capital may be carried out completely online without the need for applicants to appear in person before any authority. The decisions regarding whether online formation is possible for other kinds of companies and whether online formation can occur for limited liability companies with capital-in-kind are left to the member states. Meanwhile, member states are required to provide templates for the online formation of limited liability companies and make them available to citizens (or legal persons) of EU member states in order to facilitate the cross-border formation of corporations within the EU. The Directive has specifically pointed out certain issues that need to be regulated by member states in order to avoid some possible abuses and security breaches. However, the power to lay down detailed rules for the online formation of corporations has been absolutely left to the member states. German law provides the online formation only for limited liability companies with cash capital, while other types of companies and limited liability companies to be formed with non-cash capital are excluded from the scope of online formation. However, from August 1st, 2023, GmbHs that are to be founded with in-kind capital can also be founded online. New regulations in German law as created by DiRUG make it possible to handle the formation procedures completely online via video communication systems without applicants having to appear in person at a notary public. However, in cases where the notar [notary] is unable to perform their duties via the video communication system (e.g., if one of the parties cannot be identified or doubts exist about their legal capacity), the notary may refuse to carry out the transactions via the video communication system and require the physical participation of the person or persons concerned.

In addition to the possibility of online formation, the directive also contains regulations regarding the online filing of documents and information to the commercial register. In this context, member states are obliged to ensure that the relevant documents are able to be submitted completely online, thus enabling the registration process to be carried out online without the applicant having to appear in person before the person or institution responsible for carrying out the online submission procedure. In order to comply with this directive, DiRUG regulates German law to require notary to also be able to electronically certify the qualified electronic signatures to be executed via the video communication system. This means the law recognizes the possibility to electronically transmit documents created via the video communication system directly to the register. However, German legislation has made an exception to this, regulating that the notary may refuse online certification and require the physical participation of the person or persons concerned so that the notary can properly conduct the business, such as may occur in the case of online company formation.

Another innovation of the directive is the removal of the obligation to publish company documents and information with regard to disclosure. Instead, the register entries regarding the documents and information concerned are envisaged as being made directly accessible electronically/online. This regulation of the directive abolishes the dual disclosure system in German law, which had taken place via two separate internet portals in the form of online access to registration documents and separate disclosure of documents and information. Under the new system, only the entries in the register will be made accessible online, with the first retrieval of the entry in the commercial register via the electronic information and communication system being deemed a disclosure. The new system provides accessibility to the information entered onto the companies registers of member states, so that no difference will occur between the announced status and the recorded information. For this reason, the rule about the protection of confidence has been adapted to the new system, with the expression “confidence in the announced situation is preserved” being changed to “confidence in the registered situation is preserved.”