Closing an EU Inc: the digital liquidation procedure
Based on the proposal (COM(2026) 321), not yet adopted. The liquidation procedure described is proposed, its scope is narrow, and it may change in negotiation.
On this page
Proposal only. The wind-down provisions below are from COM(2026) 321 as proposed. They are among the less-negotiated parts of the text so far — scope and thresholds can still move.
Incorporation pages sell the birth of a company; the proposal’s authors understood that the cost of death is priced in at birth. If shutting down a failed startup takes years of national insolvency procedure, founders discount the whole jurisdiction. EU Inc’s answer is narrow but real: a digital liquidation procedure for insolvent innovative startups.
What the proposal actually provides
- A simplified, digital wind-down track for an EU Inc that is insolvent, qualifies as an innovative startup, holds no significant assets, and faces no pending litigation. The procedure runs through the same digital interface as registration, with the company struck off the register at the end.
- Creditor protection floor: publication and a window for creditors to object; if real assets or disputes surface, the case exits the fast track into ordinary national insolvency.
- Everything else stays national. The proposal does not harmonise insolvency ranking, directors’ liability in the zone of insolvency, or restructuring. A funded EU Inc with assets, employees and creditors winds up under the national law of its registered office, as any local company would.
The design mirrors the registration promise — digital, fast, cheap — applied to the exit: a clean-shutdown guarantee for the honest failure case, which is statistically the most common end state for startups.
Why this is strategically important
The benchmark haunting the whole file is Delaware, where dissolving a failed C-Corp is a known, bounded process. In parts of the EU, liquidating even an empty company can take years. That asymmetry shows up in incorporation decisions: investors and founders price the exit before they sign the entry. A credible EU-wide fast wind-down is one of the few features of the proposal with no national equivalent to fall back on — if it survives negotiation intact, it is a genuine differentiator rather than a repackaging.
The open questions are the ones to watch on the tracker: how “innovative startup” is defined and certified, where the “no significant assets” threshold lands, and whether member states accept a register-driven strike-off touching creditor rights.
Solvent closure
Winding up a solvent EU Inc voluntarily is the boring case: dissolution decided by shareholders, liquidation of remaining assets, strike-off from the register. The proposal keeps the digital, once-only mechanics; national law of the registered office fills the gaps. Until the final text and registry practice exist, treat timelines and costs as unknown.
Practical read
- If you are modelling EU Inc vs a national form, put shutdown cost and duration in the comparison, not just formation — see EU Inc vs GmbH and EU Inc vs Delaware.
- Nothing here is usable today; first registrations are not expected before ~2028. Conditions: eligibility · procedure: how to register · money: cost.