Flex BV as of 1 October 2012
13 Jun 2012
On 12 June 2012 the ‘Wet vereenvoudiging en flexibilisering bv-recht’ (legislation simplifying the rules applicable to private limited liability companies (BVs)) was passed through the Senate. It has been announced by the Minister of Security and Justice that the act will enter into force on 1 October 2012.
The new rules simplify the incorporation of a BV and in addition offer more possibilities for incorporating a 'tailor-made' BV.
In a nutshell the main changes are the following:
Capital and creditors’ protection
· The requirement of a minimum capital of EUR 18,000 will be abolished.
· The bank statement when shares are paid for in cash upon incorporation is no longer required.
· The auditor’s statement when shares are paid for in kind upon incorporation is no longer required. However, a description of the contributed assets will still have to be provided by the board members or the incorporators.
· The nominal value of the shares may be in a currency other than euros.
· The requirement of the inclusion of an authorized capital in the articles of association is dropped.
· The rules on nachgründung and financial assistance will disappear.
· The restrictions and conditions regarding the repurchase of own shares and capital reduction are largely cancelled.
· Boards of directors will be given a right of approval regarding payments to shareholders, as explained in greater detail below.
Payments to shareholders
· The BV’s board of directors has to approve payments made to shareholders, including the purchase of own shares and capital reductions.
· The new legislation provides the possibility of paying out the BV’s entire equity to the shareholders, with the exception of the reserves that have to be maintained by the BV under the law of or its articles of association.
· In addition the board of directors has to make sure that, once payment has been made, the BV is still in a position to meet those debts that are due and payable. Should this not be so, the board will have to withhold its approval. In its decision, the board will have to look ahead for a period of approximately twelve months.
· If the board has approved of a payment and it subsequently emerges that the BV cannot meet the debts that are due and payable, the directors who knew or should reasonably have foreseen this at the time of the payment, will be jointly and severally liable towards the BV for any deficits that have occurred as a result of the payments, plus the statutory interest as from the date of payment.
· The same applies to shareholders receiving the payments, with the proviso that the obligation to pay compensation applies to each of them for no more than the amount that each of them received, plus the statutory interest as from the date of payment.
Decision-making and profit entitlement for shareholders
· Resolutions may be adopted outside meetings if all those entitled to attend meetings agree. This means that the requirement of unanimity for this type of decision-making is dropped, as is the requirement to record such decision-making in writing.
· Shareholders’ meetings may be held outside the Netherlands.
· The statutory term for convening shareholders’ meetings is reduced to eight days.
· Substantially more flexibility in awarding voting rights to individual shareholders. Shareholders will also be given the possibility to appoint (and dismiss) 'own' directors. Such rules may particularly benefit joint ventures and family businesses.
· It will be possible to have shares that have no voting rights attached to them.
· Clarification of the rules governing holders of depositary receipts; the BV’s articles of association will have to state whether or not they have rights to attend meetings.
· The shareholders (and other bodies, if any) will be given wider powers to instruct the board.
· It will also become possible to create shares without profit rights.
Transfer of shares
· It will no longer be required to include a transfer restriction clause in a BV’s articles of association.
· If a transfer restriction clause is nevertheless included, the new legislation will provide more opportunities for making detailed agreements about the price or price method.
· In addition a lock-up provision may be included in the articles of association, causing the transfer of shares to become impossible for a specific period of time.
Dispute resolution (also amended for NVs)
· Under the dispute settlement rules a shareholder harming the interests of the company may be expelled, while aggrieved shareholders may demand the compulsory purchase of their shares. It will also become possible to be expelled for past conduct.
· The present dispute resolution scheme is cumbersome, time-consuming and rigid. The intention is for the procedure to become faster and more efficient for all parties concerned. For example, the possibilities of an interim appeal have been greatly reduced. The company and its shareholders will have greater scope to arrange for a dispute resolution scheme that deviates from the one provided by law, either by agreement or in the articles of association.
DLA Piper Flex BV activities
To keep you informed of the possibilities and developments surrounding the Flex BV, DLA Piper will shortly publish a newsletter, containing a detailed explanation of the changes and the new possibilities it offers. The newsletter will also pay specific attention to the consequences of the new legislation for existing BVs.
In addition DLA Piper offers you a varied range of courses, designed to suit your specific needs regarding the Flex BV. Please check our website and our further news alerts for the dates.
The introduction of this new legislation does not involve an obligation to amend the articles of association of existing BVs with immediate effect. However, the articles of association as a rule represent current legislation. In order to make the best possible use of the chances provided by the new legislation, it is nevertheless advisable to amend the articles of association of present BVs.
Should you wish to receive more information about this, please do not hesitate to contact our experts at DLA Piper.
Phone: +31 (0)20 541 9928
Mobile: +31(0)6 29 555 644
Manon den Boer
Phone: +31 (0)20 541 9871
Mobile: +31(0)6 13 270 322
Hendrik Bennebroek Gravenhorst
Phone: +31 (0)20 541 9973
Mobile: +31(0)6 12 058 857