It was November last year when European Commissioner Charlie McCreevy came to the Law Society in London and told a gathering of City lawyers what his intentions were for improving regulation at EU level. That same day, he went on to announce a comprehensive review of the EC's future priorities in the field of company law and corporate governance.


This was to be a prime example of 'better law-making' - a reassessment of the proposals for 2006 and beyond, originally foreseen by the previous commission in 2003. This would gauge whether such measures were still needed, relevant, and promoted competitiveness.



November has come around again and the commissioner has just finished his review and set forth a somewhat reduced set of priorities. Although not limited to these, he announced some key measures to the European Parliament, hailing company law as a 'test case of how we apply better regulation principles'.



As the front page of the Financial Times reported last week, one of the proposals could turn the UK and other member states with more attractive business environments into the 'Delawares of Europe'. A proposal expected in the spring would aim to allow existing companies to transfer their registered office between member states - something that should already be possible in theory, but is often not in practice. As a destination of choice, the UK, and specifically London, could benefit from this legislation. However, care would need to be taken that it does not lose out to other member states, such as Ireland. The republic is already attracting various companies' operations.



Would the UK be able to compete in terms of its regulatory and fiscal environment? While more could be done to improve the comparability of national tax regimes, the British government remains sceptical of EU proposals to create a common tax base for companies, possibly for this reason.



Mr McCreevy also announced that he would continue to look into the feasibility of creating a European private company legal form for small and medium-sized enterprises (SMEs). However, take-up of the European company model (Societas Europeae, or SE) since 2004 has been slow. Also, a large number of European &150; particularly German &150; businesses are already registered as private companies in the UK. So, although many German companies have run into problems in the UK recently for failing to comply with certain reporting requirements, this new European legal form will have to be flexible and easy to use if it is going to succeed where the SE appears to be failing. Such a model would not address the problem of having to comply with different tax regimes, but the commission is trying to garner support for a project to allow SMEs operating in several member states to file their taxes according to the rules of their home member states. The UK Treasury does not seem so keen on that one either.



Simplifying existing EU company legislation is another priority and we will hear more about this towards the end of spring next year. It does sound good in theory - tidying up the legislation, codifying it, removing all those expensive administrative burdens that are complained about. In practice, however, could this reopen a Pandora's Box of issues that have already been settled by decision-makers and run the risk of creating more complex, rather than simpler, legislation?



An issue that appears to be something of a hobby-horse for Mr McCreevy &150; who is reputed to have a passion for gee-gees &150; is the idea that companies' ownership structures should follow the principle of one share, one vote. The commissioner said he would continue to provoke debate on the issue and a study is expected out in May. It is said that the commissioner has already made up his mind to publish a recommendation on this by autumn next year. While this is not a legislative measure as such, we will have to wait and see to what extent these recommendations will advocate the maintenance of alternative share structures, such as having preference shares.



One share, one vote is billed as a next step to the proposal on shareholders' rights. This proposal to sort out the 'plumbing' of shareholder participation, particularly cross-border, should be adopted over the coming months. Once the infrastructure is in place, the commission will want to tackle some of the issues of substance, although not only one share, one vote.



Unfortunately, it looks as though the 'plumbing' is going to require UK listed companies to give 21 calendar days' notice for all general meetings, including extraordinary general meetings (EGMs) not dealing with takeovers. While the UK lobby argued for shorter periods for EGMs, the competitiveness argument appears not to be winning the day this time.



It is clear that this commissioner has made much of his attempts to engender a better-regulation ethos among his staff - not just in company law but also in financial services. However, the point is not to propose less, but to propose better - so the proof of the pudding will be in the implementation. While initial results may be encouraging, success will be measured in the course of time.



Andrew Laidlaw is internal market policy adviser at the Law Society's Brussels office. For information, e-mail: andrew.laidlaw@lawsociety. org.uk