Important changes in legislation on Dutch BVs as per 1 October 2012

Introduction

With immediate effect as from 1 October 2012, the rules on Dutch private limited liability companies (BVs) have been changed, in general providing for more flexibility and - more than was the case before - allowing for incorporation in the articles of association of tailor made arrangements.

Key amendments

The main changes are, in short:

  • Minimum share capital of EUR 18,000 no longer required.
  • Issuance of a bank statement or an accountant’s certificate when making a payment in cash or a contribution in kind on shares (either upon or after incorporation) no longer required.
  • Shares may be denominated in a currency other than the euro.
  • Allocation of voting rights can be more tailor made and non-voting shares can be created.
  • Shares that give no or limited entitlement to profits and reserves can be created.
  • Managing directors and supervisory directors can be directly appointed by the meeting of holders of shares of a specific class, whereas at present this is the exclusive authority of the general meeting of shareholders.
  • Shares may be made freely transferable. When a BV opts to apply share transfer restrictions, there will be more flexibility in drafting these and it will also be possible to provide for a lock-up period.
  • Distributions on shares will require management board approval. If a BV will no longer be able to continue to pay its debts after a distribution has been made, managing directors who knew or should have reasonably foreseen this will be jointly liable to repay the deficit. The
  • beneficiary of the distribution who has not acted in good faith may also be held liable. In addition, if a BV is required by law or its articles of association to maintain reserves, payments may only be made insofar as the BV’s equity exceeds these reserves.
  • Similar rules that will be applicable to distributions on shares will also apply to a repurchase of shares and capital reduction with repayment. In addition, certain restrictions on repurchase of shares by a BV will no longer apply and a capital reduction will no longer be subject to a two-months creditor opposition period.
  • Specific statutory financial assistance rules applicable to BVs are abolished.

Action required?

BVs are not required to immediately amend their articles of association in order to comply with the new rules. However, as articles of association may contain references to sections of current law that will change or cease to apply under the new rules, it may be advisable to assess whether the articles of association will be applied and interpreted in a different way once the new rules have entered into force.

Further information

For a more extensive overview of the most important changes and of applicable transitional law, please see our Long form overview of most important changes to legislation on Dutch BVs. If you would like to discuss any aspects of this issue, please speak to one of the contacts listed opposite, or your usual contact at Linklaters.