The explanatory statement is the key to the rest. Repasi frames the 28th regime as a “seal of quality” for innovators, skilled workers and investors, and argues that European competitiveness and the European social model reinforce each other rather than compete. The worry running through every major amendment is the same: if the new form becomes known in its first year as a vehicle for circumventing labour law, creditor protection or tax, it dies as a brand no matter how fast the registration is. So the draft trades some of the Commission’s speed and simplicity for trust and legal certainty. Whether that trade is priced correctly is the fight the committee will now have.

The Commission’s Article 4 was the proposal’s quiet engine: whatever the regulation and the articles of association did not settle fell to the national law of the place of registration. German company-law commentary spent June arguing about how far that principle reached, including whether it accidentally made mandatory national rules waivable by statute. The draft answers the debate the bluntest way available: Amendment 79 deletes the article.

In its place, Amendment 58 writes a new Article 1a with three jobs. First, a labour-law firewall: individual and collective labour law, collective agreements, social security and the right to strike sit expressly outside the regulation’s reach, with employment contracts still governed by the existing Rome I and Brussels Ia rules. Second, a new gap-filler: each Member State must designate a named “relevant national legal form” (its GmbH equivalent) whose law fills the regulation’s silences, notified to the Commission in advance. The backstop becomes a concrete, known form rather than whatever the registration country’s law happens to say. Third, a formation bar for the sectors in a new Annex Ia (next section).

For anyone who planned to pick a registration country the way one picks a flag of convenience, this closes the door. That was the loudest criticism of the proposal from unions and half of legal academia; the rapporteur conceded it before the committee fight even started.

The Commission text leaned on the word “innovative” to say who the form is for. The draft deletes it as an operative test because nobody can litigate an adjective, and replaces it with two concrete gates. A startup is defined numerically (Amendment 59): fewer than 100 persons employed, annual turnover or balance sheet total up to EUR 10 million, operating for less than 10 years since registration. And a new Annex Ia (Amendment 246) lists economic activities that cannot form a 28th regime company at all: construction; cleaning activities; hospitality services; freight transport by road; residential care activities; meat processing and production; investigation and security activities. The list can be updated later by delegated act (Article 106b).

Most of the intended audience (software, fintech, deep tech, life sciences) sits comfortably outside the excluded list. The point is structural: eligibility moved from marketing language into a rule with numbers and a blacklist, which is exactly the kind of thing advisers can test clients against.

The three founder promises survive intact: fully digital formation, registration within two working days, a maximum fee of EUR 100 (Article 16(2)). What changes is the gate in front of them. Identity verification of applicants becomes a mandatory pre-registration check (Article 14(2)(d), Amendment 110). Where national law provides, registers may also check beneficial ownership, director eligibility and creditor protection (Article 14(2a)). And the two-day clock gains an open-ended extension “by the time strictly necessary” where anti-money-laundering or fraud flags are raised (Amendment 115), with no stated maximum. Filing agents stay technical conduits; they cannot substitute for the checks (Amendment 123). A company formed past a failed preventive control can be declared null (Article 81(1)(ca), Amendment 176).

Honest copy about the draft therefore reads: as fast as two working days and capped at EUR 100, subject to identity and anti-fraud checks that can extend it. The frictionless self-service image is deliberately gone, and the notarial and registry professions that spent spring warning about preventive control will recognise much of their argument in these amendments.

The Commission tied board-level employee participation to the place of registration, which German commentators read as an invitation to organise co-determination away. The draft rebuilds the connecting factor on the place of employment (Article 12, Amendments 100 to 103): once local headcount in a Member State crosses that state’s threshold, counting branches and subsidiaries there, that state’s participation law applies. Where the workforce spans multiple participation regimes, the highest level of protection applies company-wide, and where the applicable law cannot be determined, the negotiation model of the SE Directive (2001/86/EC, the rules on employee involvement in the existing European company) kicks in with a floor under the result. A conversion out of the form carries duties to protect employees’ participation rights for at least four years after it takes effect (Article 21(6)).

Founders who register in one country and hire across borders will need to treat board-level participation as a planning question, not a footnote. That is a real compliance cost, and it is the deliberate price of the seal-of-quality framing.

The draft’s most original invention is a voluntary steward-owned variant, EU Inc. SO, elevated into the regulation’s objectives themselves (Amendment 57). Two share classes are permanently separated: steward shares carry control and no economic value; economic shares carry the money and no control (definitions in Amendments 68 to 74). The separation is non-waivable even by unanimous shareholder vote. Enforcement is self-executing: transactions that would weaken the lock are legally ineffective, business registers must refuse them, and the company files an annual, independently assured stewardship compliance report (new Articles 8a and 8b). Conversion is one-way; a steward-owned company cannot convert back into an ordinary one (Article 41(1a)). Member States cannot block the variant for lack of a national steward-ownership law (Amendment 78), and the name is protected against steward-washing (Amendment 84).

This is the German Verantwortungseigentum debate delivered as a pan-European legal form. Nothing like it exists in the Commission text, and for mission-locked founders it may end up the single most attractive thing in the draft.

The Commission proposed an EU-wide employee stock option plan (EU-ESO). The draft keeps it and adds an employee stock ownership plan, the EU-ESOP (new Article 78a, Amendment 168): actual shares issued for work or services, with vesting, closed to anyone holding more than 25 percent of the voting rights or economic rights, now or in the previous 24 months. To make that possible, work and services become valid in-kind contributions (Article 65, Amendment 158), reversing the Commission’s exclusion of sweat equity. Both instruments carry the same fence: equity may never replace statutory minimum wage, collectively agreed pay, pensions or social security, and participation is voluntary and supplementary (Articles 78(2a), 78a). Employees must receive a written risk disclosure before committing. On tax, the draft points at deferral (no tax at grant) with a guarantee of treatment no less favourable than domestic equivalents, plus an anti-avoidance rule against using equity to shrink the social-security contribution base (Article 79(4a), Amendment 174). The exact taxable event in Article 79(2a) is unclear in the source text, so treat the tax detail as unsettled (see the drafting notes below).

One flat reversal deserves its own section because so much existing coverage, including guidance pages across the web, still says the opposite. The Commission text let a 28th regime company trade its shares on a multilateral trading facility (MTF), a lighter public market. The draft flips the sentence: shares “are neither tradable on a multilateral trading facility nor on a regulated market” (Article 60, Amendments 156 and 157). A company that wants to go public must first convert into a national public limited company (Recital 41, Amendment 23). Under this draft the 28th regime is a private-company vehicle, full stop. That is a real limitation for anyone whose pitch deck ends in an IPO, and it will be one of the most fought-over amendments in committee.

The Commission’s simplified winding-up for “innovative startups” becomes a supervised track with hard edges (Chapter X, Articles 88 to 98). Access requires meeting the startup definition and having fewer than 20 creditors; companies that converted or merged into the form within the previous six months are barred, an anti-abuse rule aimed at insolvency tourism. Access cannot be denied for lack of assets, and lack of money no longer justifies skipping an insolvency practitioner: waiving one now takes eight cumulative conditions, including wages, taxes and social contributions paid up to filing, plus a court finding that creditors and employees are safe. Filing requires more disclosure (cause of failure, six months of transactions, employee and wage detail). Wage claims are itemised, individually notified, and excluded from the general enforcement stay by default.

Cheaper and faster than ordinary insolvency, yes. Self-service liquidation, no. The draft read the academic criticism of Chapter X and answered with supervision rather than deletion.

Two new chapters exist in no version of this proposal before now. Chapter XIa builds dispute resolution: certified out-of-court bodies for business disputes, staffed by corporate-law specialists, deciding within 90 days (extendable once to 180), with employee-participation disputes excluded (Article 103a); an encouragement for Member States to designate specialised courts or chambers with fast-track, digital, English-capable case handling (Article 103b); and a public database of national and Court of Justice judgments on the form (Article 103c). Chapter XIb adds a free Commission-run information platform: registration tutorials, guidance on the applicable national law per Member State, dispute-settlement signposting, financing information, machine translation and an update notification service, interoperable with the e-Justice Portal and the business registers interconnection system BRIS (Article 103d, Amendment 232). The explanatory statement names the comparison openly: predictable, expert, fast dispute resolution is what makes Delaware work, and this is the draft’s attempt at a European answer.

The loudest open question, the legal basis, stays open on purpose. The explanatory statement argues that company-law harmonisation traditionally runs through Article 50 of the Treaty on the Functioning of the European Union rather than the single-market basis (Article 114) the Commission chose, and says the Commission “fails to explain” its choice; but the draft does not amend the basis “at this stage”. The Council’s own legal service pushed the same question in June, per reporting by Euractiv on 22 June 2026. Translation: the rapporteur is keeping the biggest lever in reserve. If the instrument fight (regulation versus directive) reopens, it will not be by accident.

The draft shows signs of a fast finish, and since others will quote it, the slips are worth naming. The excluded-sectors annex is created and applied as “Annex Ia” in the operative text (Article 1a(5), Amendments 245 and 246) but called “Annex II” in Recital 5, in the review clause (Amendment 243) and in the explanatory statement; cite Annex Ia, the operative name. “Innovative” survives in Recital 5 despite being deleted as the operative test. Article 103d(4) points to the judgments database “referred to in Article 103a” when the database is created by Article 103c (the review clause in Amendment 243 cites 103c correctly). The one-way-conversion rule for steward-owned companies is stated twice inside the same new paragraph (Article 41(1a), Amendment 141). And the tax trigger for EU-ESOP shares stops mid-thought: income “shall be deemed to arise and thus be subject to taxation only at the time when the shares obtained” (Article 79(2a), Amendment 171), a sentence missing its ending, which is why the tax description above stays general. None of this changes the substance; all of it says the text will be cleaned in committee.

• 15 to 16 July 2026: the Legal Affairs Committee (JURI) considers the draft report.
• 17 July 2026: deadline for amendments from the political groups; opinions from the economic (ECON) and employment (EMPL) committees are due the same day. Expect the labour firewall, the participation rules, the listing ban and Annex Ia to draw the heaviest fire from Axel Voss (European People’s Party), the shadow rapporteur, and the startup and investor camp, and the strongest defence from the labour side.
• 7 September 2026: JURI considers the amendments; a committee vote is expected in September and a plenary vote in October (both to be confirmed).
• In parallel, the Council’s Working Party on Company Law continues under the new Irish Presidency (Sessions 11 and 12 on 8 and 23 July), with the 28th regime named in Ireland’s presidency programme.

The live procedural status is on the progress tracker.

• Draft report PE790.143v01-00 (PR\1346422EN.docx), Committee on Legal Affairs, rapporteur René Repasi, 29 June 2026; not yet on the Legislative Observatory at publication, procedure file 2026/0074(COD)
• Commission proposal COM(2026) 321 of 18 March 2026, the 28th regime corporate legal framework
• Council Directive 2001/86/EC (SE Directive, employee involvement), the negotiation model referenced by the draft’s participation fallback
• Euractiv, “Council legal experts urge fundamental rework of EU Inc” (22 June 2026, paywalled)