Given the global orientation of the German economy, it is important that jurisprudence and law enforcement offer companies effective solutions, even in international matters. The objective pursued with the introduction of Commercial Courts, namely to strengthen Germany as a jurisdiction for national and international economic disputes and to improve its standing in international comparison, is therefore a positive signal for Germany as a legal location. 

However, the judiciary exposes itself to criticism of being a "two-class justice" if modern, fast procedures conducted before particularly competent chambers are only offered for high dispute values, while the general empowerment and digitisation in the judiciary continue to progress very slowly. Both the length of proceedings and the quality of decisions are often subject to critical scrutiny. Given the declining caseload of ordinary courts, it is crucial for acceptance that companies are heard in their concerns by courts competent in the specific circumstances of the case. This also includes retaining the Commercial Courts with the well-established institution of honorary commercial judges, possibly in a modernised procedure, to effectively incorporate their expertise throughout.

In addition to an efficient judicial system, attractive alternative dispute resolution mechanisms are required. For this reason, the German Chamber of Commerce and Industry (DIHK) has established an arbitration court under § 10a Sec. 4 No. 3 IHKG, which promotes all forms of alternative conflict resolution, including mediation, conciliation, and expert determinations, for companies at home and abroad, involving the IHKs and AHKs. The initiatives to modernise arbitration law are another step for Germany as a dispute resolution location.

Many EU proposals foresee complex and burdensome information obligations for companies. For instance, businesses are required to inform consumers about numerous details and register with various organisations concerning data protection, distance selling, platforms, and food sales. Important details, such as contractual terms, often get lost amidst this information overload. Simultaneously, reporting and documentation obligations consume valuable company resources and burden businesses without actually benefitting consumers. New obligations should be avoided unless they bring genuine benefits for consumers or others. Existing obligations should be reviewed and minimised. The guiding principle should remain that of the informed and capable consumer.

Additionally, the European Commission aims to make companies mandatory participants in information gathering for general market surveillance and for monitoring compliance with Union law. This includes extensive, sanctionable data requests regarding market data. By doing this, the EU not only contradicts its own goal to reduce bureaucracy but also relies on a form of government market control that should only be justified under very strong arguments (compare guideline "Review intervention powers": Example European Insurance and Occupational Pensions Authority (EIOPA)).

Review intervention powers

The financial and insurance sectors also display a rapidly increasing regulatory density and intensity in supervision over insurance, financial investment, real estate loan brokers, and credit brokers. Often, no significant benefits regarding regulatory goals can be identified. Effectiveness and proportionality, as well as established and functioning national structures, are insufficiently considered. This results in unnecessary and unjustified bureaucracy buildup. The significant expansion of powers held by European supervisory authorities (e.g., the European Insurance and Occupational Pensions Authority – EIOPA) and their intervention options in solely national matters raises concerns regarding data privacy and constitutional law, and contradicts the principle of subsidiarity.

This harmful economic development is currently being advanced by the European Commission and has not been effectively limited by the German government. Over many years, the German Chamber of Commerce and Industry (IHK organisation) has ensured effective and proportional supervision. However, the current approach practised by European supervisory authorities like EIOPA is inappropriate. This extends to the implementation of supervisory obligations in the field of general hazard prevention without any significant benefit to the regulatory goals, such as IT security. The considerable expansion of EIOPA’s powers and intervention options in exclusively national matters also poses constitutional concerns and is rejected by the affected brokers.

Critical intervention powers of European oversight include, for example, "reporting obligations" in every individual instance concerning rejected or revoked business licenses, the establishment of potential "public reprimand registries", EIOPA’s authority to collect unlimited data based on a general clause, and the introduction of further expansions of intervention powers and reporting obligations regarding new regulations such as the Digital Operational Resilience Act (DORA) and the Retail Investment Strategy (RIS). These regulations mainly conflict with the principles of subsidiarity, proportionality, and data minimisation.

Consider the effort-benefit ratio of informational and documentation requirements

Transparency is fundamentally welcomed by companies, but it must be targeted and measured against an effort-benefit ratio: Excessive information and increasingly extensive reports often fail to reach their intended audience, as evidenced by industry experience. Although it opens up new business and analysis areas for specific industries, some companies, for example, demand the expansion of sustainability reporting (compare chapters "Corporate Responsibility" and "Sustainable Finance"). However, the excessive effort required by many other companies results in minimal individual benefits, and the overarching European value often remains questionable. Hence, the expansion of sustainability reporting is mostly rejected.

Regarding the currently discussed retail investor protection strategy by the European Commission, the proposed documentation/advisory/reporting obligations seem excessive or even counterproductive. An "excess" of information can lead to critical information going unnoticed.

The general trend of expanding available information from companies or introducing new disclosure obligations should be critically reviewed. Existing duties should be assessed regarding their genuine use and actual benefits for recipients, and potentially reduced or eliminated. Companies should not be compelled to disclose trade secrets, whether through EU Commission or EIOPA requests to traders and/or national supervisors. Individual disclosure obligations should be reduced to what is necessary. The European Commission can effectively obtain information about business practices and local economic conditions via institutions like chambers. However, this should occur on a voluntary basis from companies.

If informational and disclosure obligations are genuinely necessary, companies should only be required to disclose essential information. Although some companies support extensive information obligations, rules for disclosure, especially for SMEs, should be clear and easy to implement.

Differentiation by company size and capital market orientation

Within the scope of appropriateness, a differentiation of requirements by capital market orientation and company size is necessary (compare chapters "Sustainable Finance" and "Strengthen SMEs"). When additional requirements are placed on larger companies due to justification and proportionality, a mechanism should ensure that smaller and medium-sized suppliers are not indirectly affected. If multiple supervisory authorities are responsible, information should be requested through one authority only.

The European Economic Code of Law, complemented by an optional so-called '28th regime' in company law, is only of interest to businesses if it not only consolidates the numerous existing regulations but also leads to a substantive and systematic revision of the existing regulatory framework. This would result in simplification. What is required are simpler, clear regulations focused solely on necessities, strict adherence to proportionality, and the incorporation of instruments such as self-commitment, the 'Comply-or-Explain' principle, and competition mechanisms. These measures can reduce the sometimes action-inhibiting complexity of existing European economic laws.

The complexity of dealing with a 28th regime alongside the existing harmonised European and national laws is significant. Above all, the established regulatory systems of member states must not be jeopardised at the interfaces with national law. The use of such a 28th regime in company law must be fundamentally possible for all businesses, including SMEs. The selection of national legal forms should also not have indirect adverse consequences, for example, by granting certain reliefs solely to European legal or operational forms.

Conflict of laws is complex and has significant implications for companies. A harmonisation should be critically examined for legal certainty, cost, and benefits for the commercial economy. The international competition among legal systems is beneficial – but it also forces us to provide companies in Germany and Europe with optimal legal competitive conditions.

Many companies find the General Terms and Conditions (AGB) law, particularly in an international context and for cross-border contracts, to be too rigid. The scope of application of AGB law is presently so extensive that it is practically impossible to make individual agreements. This, for instance, leads to the situation where contractual limitations of liability are de facto excluded in many cases.

As a result, companies often resort to foreign legal systems for cross-border contracts. For Germany as a legal jurisdiction, foregoing the choice of German law as the basis for contracts represents a significant disadvantage. On the other hand, the AGB law serves an important protective purpose, offering many companies protection against more dominant suppliers or purchasers. Therefore, a solution is required that balances the legitimate need for protection, especially for small and medium-sized enterprises, with the equally legitimate desire of large and internationally active companies for sufficient flexibility in contract design. Freedom of contract should remain the guiding principle and only be restricted in typical and compelling cases. In the cross-border setting, companies should also have the option to exclude AGB law while still retaining German law. In such cases, AGB law protection is already voided when the law of another country is fully agreed upon. These adjustments to entrepreneurial realities in international trade would also usefully complement other legislative efforts to strengthen Germany's legal jurisdiction, such as the introduction of commercial courts.

A successful economic location can only exist if companies in their own country and in the EU remain efficient and can assert themselves in the framework of fair and free competition. Even strongly growing regulatory requirements for professional practice, emanating from harmonized Union legislation, should follow this guiding principle. European directives, regulations, and Regulatory Technical Standards (RTS) have already led to increasingly complex sets of rules in this context. However, economic freedom must not lose its guiding role in economic life nor make way for government interventions.

Economic freedom, restricted on the one hand by the requirements of competition law, and on the other by mandatory harmonization to establish the market and ensure legitimate protection interests, should also remain the guiding principle in the EU.

From the perspective of the economy, the idea of examining the introduction of a European Code of Commerce with the sole aim of simplifying and standardizing regulations is therefore plausible.

New or extended rules for professional access and practice, such as for financial service providers and credit brokers, sometimes overly restrict economic freedom. This applies particularly to new and excessively detailed requirements for licensing, registration, and qualification, as well as numerous informational obligations. A strict application of proportionality in regulation concerning the regulatory goal is essential. Instead, regulations are often broadly justified by the protection of the public good. However, the restrictions frequently benefit only individual parties or smaller groups. Consequently, companies can only be established or continued at higher costs.

The Act on the Modernisation of Partnership Law (MoPeG) explicitly regulates the legal capacity of partnerships in civil law. In trade law, however, partnerships with legal capacity are still not recognised as traders in administrative practice, which continues to result in incompatibilities between civil and trade law. It is therefore necessary to clearly establish the legal capacity of partnerships in trade law through legislation, as otherwise, for example, avoidable bureaucratic burdens or delays may occur when issuing trade permits. However, sufficient transitional and bridging provisions must be provided.

Binding corporate capital primarily to the purpose of the company and designating responsibility independently of inheritance – this is secured by some companies through foundations, dual-purpose foundations or combined foundation and corporate models. They separate assets and voting rights with appropriate design of statutes, rules of procedure, and management contracts. However, these models are associated with certain complexity and resulting costs; there is legal uncertainty as to whether the preservation of a company fulfils the purpose of the foundation.

Sustainable needs of the economy should also be legally reflected. The discussion about modern legal forms of entrepreneurial activity is therefore sensible, but its results should prevail in free and fair competition of legal forms.

Appropriate corporate models should also be available to small and medium-sized enterprises. Some companies as well as associations maintained by them and two German Chambers of Commerce and Industry (IHKs) have identified a need for an independent legal form. However, from the predominant perspective of the business sector, the existing options generally meet these needs. If the needs for permanent separation of assets, voting rights, and corporate governance can no longer be met through these options, legal amendments to existing legal forms should be examined.

Any potential legal amendments or new legal constructs should be practical and competitively neutral, including their terminology. Asset binding, if it is meant to be a distinctive feature, must be legally and practically ensured. Additionally, certain voices argue that a balanced ratio of risk and liability of shareholders, as well as creditor protection, must be considered. Especially with regard to small and medium-sized enterprises, consideration could be given to further flexibilising and simplifying foundation law and granting founders a temporary right to amend the foundation's articles. Finally, it should be examined under which conditions the continuation of a company is an allowable purpose for a foundation. A decoupling of ownership and responsibility through asset binding would, from the predominant perspective, require supervision – as there is an interest in ensuring that the company is continued primarily in accordance with the will of the founder or depositor, who renounces profit distribution and liquidation proceeds.

Facilitating business formation and authentications of register applications regardless of location not only simplifies cross-border activities. The possibility of notarization via video communication should fundamentally treat all legal forms equally and be extended beyond business formation to statutes amendments, transfer of company shares, powers of attorney in connection with notarization of shareholder resolutions, etc., irrespective of legal form. Register authentications should also be offered in an online procedure independently of legal form.

In doing so, the trustworthiness of data in the commercial register, as well as other registers, must not be compromised – a harmonized European standard is needed. A flexible choice of notary can correspond to the practical needs of shareholders and managing directors. Secure yet practical identification of individuals and authenticity of documents remain essential for business transactions. Secure digital transmission channels between member state registers and the recognition of electronically certified copies could facilitate cross-border corporate processes.

Previously required certifications of documents from companies in EU states or time-consuming procurement of apostilles would thus no longer be necessary. Registers in other EU states could rely on the entries of the main office, for instance, during branch office registrations, applying the "Once only" principle to alleviate the burden on companies.

Digital options, designed to be simple and secure, can significantly reduce organizational effort and costs for businesses. The procedure should be user-friendly, considering potential safety standards, without obligating founders, shareholders, or managing directors to purchase special cost-intensive software or signatures.

Practical sample statutes for various legal forms can significantly support founders, reduce formation costs and fees, and should be provided by legislators with consideration for legal certainty.

Under a model of a "virtually registered office," businesses could forego physical offices, preventing complexities inherent in cross-border processes. However, additional regulatory and registration requirements should be introduced, including measures to secure competition neutrality. Connections, such as for jurisdiction and applicable laws, should be developed. From a commercial perspective, enabling virtual offices (from a corporate law perspective) is not necessary against this backdrop.

Comprehensive modernisation of the register landscape is needed to enable seamless and cross-agency digital processes. Register modernisation must be prioritised accordingly and implemented consistently and comprehensively.

The "Once Only" principle, i.e., data sharing and reuse between authorities, ensures that businesses only report data once. This offers the opportunity to drastically reduce bureaucratic costs in administration and business. However, it also places high demands on modernising the administration and the distribution of tasks within the federal state.

For publicly accessible data, an appropriate balance should be struck between the advantages of information on the one hand and the interests of data protection and security on the other. Entrepreneurs also have the right to ensure that personal data, which is not required for business communication, is not accessible by everyone. Data quality must be taken far more seriously than before in this regard.

New registers should be avoided, and access to existing registers should be harmonised EU-wide. Where well-justified restrictions on access to registers exist from the perspective of companies, these should be retained. Where meaningful access restrictions do not exist, they should be introduced.

From the prevailing viewpoint of companies, a distinction is needed between information that is disclosed to the public through registers and additional information submitted to the register to document entries. Free access via internet retrieval should thus be limited to essential data and documents for business communication.

Registers serve transparency in individual cases. To prevent the creation of shadow registers and associated misleading of companies, mass inquiries should not be possible according to a predominant view.

Businesses should not bear register fees alone. Rapidly changing metadata – such as details about the number of employees – should not be required. For assessing legal relationships, it is not necessary to provide information about connections between companies or shareholders and managing directors from the perspective of most companies.

Confidence in the accuracy of register data should be strengthened through uniform minimum standards for verifying company details before registration. Simultaneously, additional legal bases for deleting certain inactive companies are needed.

SMEs often establish companies under national laws in various member states. This results in significant time, consulting, and cost efforts. A feasible supranational legal form, also with multiple shareholders and directors as an additional option, could particularly support SMEs in their activities across Europe. The Commission's withdrawn proposal for a Europe-GmbH (European Private Company) was already a good foundation and should, from the industry's perspective, be taken up again.

The previously balanced equilibrium between consumers and companies in the field of product liability has proven effective. Any unilateral shift of liability risks without solid reasoning at the expense of companies endangers innovation and competitiveness within the European economy. The business community rejects adopting US legal procedural models, such as the so-called "discovery process," which the EU repeatedly seeks (for example, the draft of a new Product Liability Directive). These models contradict not only continental European legal traditions but also jeopardize procedural fairness. Likewise, facilitating claims through evidence rules and eliminating self-retentions and maximum limits disrupt the parties' balance. Additionally, they pose a threat of increased product costs to the detriment of Europe's industrial base. For digital products, the Product Liability Directive merely requires minor adaptations.

Companies required to prepare financial statements according to international accounting standards (IFRS/IAS) or opting to do so voluntarily need robust representation of their interests within the International Accounting Standards Board (IASB). Small and medium-sized enterprises (SMEs), on the other hand, are generally aligned with accounting under the German GAAP (HGB) and predominantly wish to continue preparing financial statements according to HGB in the future. 

During standard-setting processes, the interests of all accounting entities should be considered. At the European level, the EU Commission should play a stronger role in international committees, especially in the development of standards. For listed SMEs that are obliged to prepare accounts under IFRS, a simplified version of these standards could be practical and beneficial. Unrelated reporting obligations unnecessarily inflate legal reporting requirements, increasing preparation and audit costs. For non-capital market-oriented SMEs, the HGB accounting standards should remain SME-friendly and free from references to IFRS. Creating a completely independent European accounting standard for SMEs is currently deemed unnecessary by the business community.