Council Working Party on Company Law holds tenth EU Inc examination session

The Council Working Party on Company Law held its tenth technical examination session on EU Inc. on 2 June 2026, continuing the intensive article-by-article scrutiny of COM(2026) 321 that began in late March. The session marks a continuation of the accelerated pace set under the Cyprus Presidency, with member state delegations maintaining strong support for the initiative while working through critical questions on legal basis, insolvency procedures, taxation, and worker co-determination.

Overview of the tenth examination session

The tenth Working Party session took place on 2 June 2026, part of a dense calendar of technical meetings scheduled through early July. According to Council documents, the Working Party had already completed first examination of more than half of the proposal by mid-May, setting a quick pace compared to typical legislative files.

The Working Party has already completed a first examination of more than half of the Proposal. This represents significant progress since the first session on 23 March 2026, just five days after the Commission published the full legislative package.

No public readout from the tenth session has yet appeared on the Council register, consistent with the pattern established across all previous sessions. The substantive negotiating positions and detailed amendment proposals from member states remain confidential at the working-party level.

Key topics discussed by the Working Party

The EU Inc proposal establishes a harmonised corporate legal framework to be integrated within the national legal order of each member state. Key elements of the Proposal include a digital-by-default framework, incorporation within 48 hours, with costs lower than 100 Euros, digital procedures throughout the company's life-cycle and once-only transmission of corporate information among authorities.

Council discussions have surfaced several recurring areas requiring clarification:

Legal basis and scope: The proposal uses Article 114 TFEU (internal market competence) to harmonise company formation rules across 27 jurisdictions. Member states are examining whether this legal basis adequately supports the taxation and employment provisions included in the text, particularly Article 79 on employee stock option taxation.

Insolvency provisions: The proposal provides faster and digital insolvency procedures for EU Inc. companies, and an EU employee stock options scheme with harmonised features, and harmonised timing of taxation. Delegations continue to assess how these simplified procedures interact with existing national insolvency frameworks.

Forum shopping and safeguards: From the discussions, further clarifications may be needed on issues, including the legal basis, insolvency and taxation aspects, forum shopping, co-determination and the need for more safeguards. The ability of founders to freely choose the member state of registration, independent of operational headquarters, remains a central design question.

Worker participation: Co-determination requirements vary significantly across member states. The proposal requires EU Inc. companies to respect employee participation rules of the member state of registration, but delegations are examining whether additional harmonised safeguards are necessary.

Progress assessment: Where the EU Inc proposal stands

By early June 2026, the proposal has moved through multiple institutional layers with unusual speed. The European Council conclusions of 19-20 March 2026 called on co-legislators to adopt the regime by the end of 2026. The conclusions call on the co-legislators to adopt the regime by the end of 2026, on the basis of the Commission proposal of 18 March. António Costa confirmed at the post-summit press conference that timelines should be implemented by end of 2027 but mostly this year, in 2026.

In the Council track, technical examination has now proceeded through ten working-party sessions since late March. Further Working Party meetings are scheduled for 2 June, 17 June, 2 July, and 8 July. The June sessions will determine whether enough convergence exists to elevate contentious issues to Coreper (Committee of Permanent Representatives) for political resolution.

The Competitiveness Council held its first ministerial-level policy debate on 28 May 2026. On 28 May, COMPET ministers held the first minister-level policy debate on EU Inc. The public readout signals momentum, not agreement on text, and leaves safeguards, legal certainty, and national labour rules as negotiation points.

In the Parliament, René Repasi (S&D, Germany) was appointed rapporteur on 23 April 2026. René Repasi (S&D, Germany) was appointed rapporteur on 23 April 2026, and the committee referral was announced in plenary on 18 May. Opinion committees ECON (economic affairs) and EMPL (employment) are preparing their own assessments, with Aurore Lalucq and Johan Danielsson leading respectively.

Stakeholder reactions and implications

Reaction to the proposal has divided along predictable lines. Startup founders and investors broadly support the core framework, particularly the digital-first registration process and flexible governance model. The EU-INC campaign, led by European entrepreneurs, has mobilised to defend free choice of registration seat against efforts to restrict it.

"It will give all European innovative companies the possibility to register once and for all in 48 hours, for maximum 100 euros, with no need for a bank account or with no minimum shared capital requirements, for all their operations throughout our European Single market."

Source: Stéphane Séjourné, Executive Vice-President for Prosperity and Industrial Strategy, 18 March 2026

Trade unions have raised concerns about potential regulatory arbitrage. The European Trade Union Confederation, for instance, has argued that employees' rights are insufficiently safeguarded. They are calling for the proposed regulation to be redrafted to align with the EC's stated intention not to damage employment rights.

Legal professionals in civil-law jurisdictions remain concerned about the proposal's impact on notarial systems. The text allows formation using standard templates without notarial involvement for the 48-hour fast-track procedure limited to EUR 100, but permits member states to require notarisation for bespoke articles of association.

Parliamentary rapporteur Repasi has identified gaps in the Commission text. Measures such as digital company creation within 48 hours and harmonised stock option regimes are "vital steps" for integrating the internal market, but important elements from the Parliament's report are missing from the proposal. These include "genuine rules on asset locks to prevent killer acquisitions and prevent abuse regarding creditor protection, labour law and employee board participation."

Timeline expectations for Council adoption

The political target remains end of 2026 for final adoption. Given its key importance for the EU's competitiveness, the Commission is calling on the European Parliament and the Council to reach an agreement on the EU Inc. proposal by the end of 2026.

Meeting this deadline requires the Council to reach a general approach (common position) by early autumn 2026. The working-party examination through July will produce a draft text with member state positions clearly marked. Coreper will then attempt to resolve outstanding political questions in September or October, allowing ministers to formally adopt a general approach at a Competitiveness Council meeting before year-end.

Parliament's timeline is less advanced. JURI committee work typically requires 6-9 months from rapporteur appointment to committee vote. With Repasi appointed in April, a JURI vote might occur in late 2026 or early 2027. This schedule creates pressure to begin interinstitutional trilogues before Parliament has adopted its first-reading position, an increasingly common practice when political deadlines are tight.

The ordinary legislative procedure allows up to three readings, but more than 85% of laws under the ordinary legislative procedure are adopted at the end of the first reading or beginning of the second reading. Given the high-level political commitment from the European Council, co-legislators will work to achieve first-reading agreement through intensive trilogue negotiations.

If agreement is reached by December 2026, the regulation could enter into force in early 2027. As a regulation rather than a directive, it would apply directly in all member states without national transposition. The Commission proposal calls for the EU central interface (the digital registration portal) to be operational at entry into force, enabling companies to begin forming EU Inc. entities immediately.

What this means for European founders and cross-border businesses

The tenth working-party session confirms that EU Inc. remains on an accelerated legislative track despite substantive disagreements among member states. For founders, investors, and advisors planning cross-border operations, three implications stand out:

Track Council positioning closely: The working-party examination through July will determine whether member states accept the proposal's core design choices: free choice of registration seat, EUR 0 or 1 minimum capital, fast-track formation without notarial involvement, and harmonised tax treatment of employee stock options. Changes to any of these elements would fundamentally alter the regime's utility for startups.

Prepare for 2027 availability: Assuming legislative agreement by year-end 2026, EU Inc. could become available for company formation in the first half of 2027. Legal teams should begin mapping how EU Inc. compares to existing national forms like German GmbH, French SAS, Dutch BV, and Delaware LLC for specific use cases.

Monitor implementation details: Critical operational questions remain unresolved in the proposal and will be determined through implementing acts after the regulation is adopted. These include the precise content of standard articles of association templates, the design of the EU central interface, and coordination mechanisms between business registers. Companies planning to use EU Inc. should follow Commission implementing work closely once the regulation enters into force.

For ongoing updates on Council negotiations, Parliament positioning, and trilogue progress, see our EU Inc. timeline tracker and subscribe to receive analysis as each milestone occurs.