FLEX BV OVERVIEW OF MOST IMPORTANT CHANGES TO LEGISLATION ON DUTCH BVs; CURRENT AND NEW RULES COMPARED AND OVERVIEW TRANSITIONAL LAW

Transcription

1 FLEX BV OVERVIEW OF MOST IMPORTANT CHANGES TO LEGISLATION ON DUTCH BVs; CURRENT AND NEW RULES COMPARED AND OVERVIEW TRANSITIONAL LAW (ENTERING INTO FORCE AS PER 1 OCTOBER 2012) This document is intended to provide an overview of the most important changes to legislation on private companies with limited liability incorporated under the laws of the Netherlands, taking effect as per 1 October 2012, and of the applicable transitional law. It is not intended to be comprehensive, nor to provide legal advice. Should you have any questions, please contact one of your regular contacts at Linklaters. 1

2 Capital Minimum capital At least EUR 18,000 must be issued and paid up. No longer a requirement. Authorised capital Obligatory. Optional. Nominal value Capital protection rules Obligation to pay for shares upon issuance States limit up to where shares can be issued without having to amend the articles of association. At least 20% of the authorised capital must be issued. Must be denominated in euro (in old articles of association it can still be denominated in Dutch guilders). Can be put in maximum two decimals. Main rule: The full nominal value of each share must be paid upon subscription. Postponement of payment: Postponement of the obligation to pay for shares will be allowed for three quarters of the nominal value of the shares. Postponement can be granted until the BV requests for the payment to be made. Managing directors are jointly liable for any legal acts performed in the time before the obligation to pay for shares Unchanged. No longer a requirement. Can be denominated in a currency other than euro (only one type of currency can be stated in the articles of association). Can be put in more than two decimals (except when the nominal value is still stated in Dutch guilders). Unchanged. Postponement of payment: Postponement of the entire obligation to pay for shares will be allowed. Postponement can be granted until the BV requests for the payment to be made, or for a certain period of time. Rule is cancelled. 2

3 has been satisfied and before the paid up capital at least equals the minimum capital. Note: The rule that managing directors are jointly liable for legal acts performed in the period between incorporation of the BV and its registration with the Dutch Trade Register will still apply. Payment in cash Contribution in kind A bank statement must be issued. When payment is made in a currency other than euro, the bank statement must include a statement on the exchange rate. Payment in currency other than euro: To determine if the obligation to pay has been satisfied, the exchange rate on the day of payment, or, if payment was made earlier than a month before incorporation, the exchange rate on the day of incorporation, shall be decisive. Description: A description of the contribution to be made must be prepared by the incorporators (in case of incorporation) or by the managing directors of the BV to which a contribution is to be made (in case of contribution after incorporation). No longer a requirement. Payment in currency other than currency of the nominal value of shares according to articles of association: To determine if the obligation to pay has been satisfied, the exchange rate on the day of payment shall be decisive. Description: Unchanged. Description will be valid for a period of five months. Description will be valid for a period of six months. A new description must be prepared if the value of the contribution to be made has considerably decreased since the date to which the description pertains. Accountant s certificate: Required. Accountant s certificate: No longer required. Also no longer required when an NV is converted into a BV and when a BV is a party to a statutory demerger in capacity 3

4 of acquiring company. Distributions Balance sheet test: Authority: Distributions on shares may be made only insofar as the amount of the BV s equity exceeds the aggregate of the paid and called up part of the capital and the reserves which must be maintained pursuant to the laws of the Netherlands or the articles of association. General meeting, unless the articles of association provide that another corporate body is authorised. Balance sheet test and distribution test: Authority: Balance sheet test: Distributions on shares may be made only insofar as the amount of the BV s equity exceeds the aggregate of the reserves which must be maintained pursuant to the laws of the Netherlands or the articles of association. Distribution test: The management board must assess whether the BV will after the distribution still be able to continue to pay its payable debts. See hereinafter under Authority. General meeting, unless the articles of association provide that another corporate body is authorised. A resolution to make a distribution on shares will have no effect for as long as the management board has not granted its approval thereto. The management board shall only refuse to grant the approval if it knows or should reasonably foresee that the BV will after the distribution has been made no longer be able to continue to pay its payable debts. Period of foreseeability: the customary period for what a person should know or should reasonably foresee is one year. 4

5 Sanctions: Nullity: If the provisions on distributions on shares are not observed, a resolution to make a distribution will be null and void and the beneficiary of the relevant distribution must reimburse the distributed amount as having been unduly paid, regardless of whether he is in good faith or not. Sanctions: Liability: based on established case law: Supreme Court 8 November 1991, NJ 1992, 174 (Nimox) and Supreme Court 6 February 2004, JOR 2004/67 (Reinders/Didam). Liability (the new rules are aimed at codifying the established case law referred to in the column on the left): The managing directors/actual policymakers will be jointly liable for the deficit resulting from the distribution, with the statutory interest accrued from the day of the distribution, if the BV after the distribution has been made is no longer able to continue to pay its payable debts and the managing directors/actual policymakers should have known or foreseen that at the time of the distribution. Possibility of exculpation for managing director/actual policymaker who proves that he cannot be blamed for the fact that the distribution has been made and that he has not been negligent in taking measures to avert the consequences. 5

6 The beneficiary of the distribution who is not in good faith must reimburse the deficit up to a maximum of the amount or the value of the distribution received by him, with the statutory interest accrued from the day of the distribution. If managing directors/actual policymakers have paid the amount due, the beneficiary of the distribution must make the reimbursement to the managing directors/actual policy makers, in proportion. Computation basis for the appropriation of profits: Own shares: For the computation of distributions, shares held by the BV in its own capital shall be taken into account, unless the articles of association provide otherwise. Computation basis for the appropriation of profits: Own shares (the reverse of the old rule): For the computation of distributions, shares held by the BV in its own capital shall not be taken into account, unless the articles of association provide otherwise. Amount to be taken into account: For the computation of the amount to be distributed on each share, only the amount of the obligatory payments on the nominal value of the shares shall be taken into account, unless the articles of association provide otherwise. Amount to be taken into account: For the computation of the amount to be distributed on each share, only the amount of the obligatory payments on the nominal value of the shares shall be taken into account, unless the articles of association provide otherwise or all shareholders consent to deviation from this rule in respect of each distribution. A provision in the articles of association to deviate from the main rule shall require the consent of all holders of shares 6

7 whose rights the amendment of the articles of association is detrimental to. Entitlement to profits/reserves: The profits shall accrue to the shareholders, unless the articles of association provide otherwise. Shareholders cannot be entirely excluded from sharing in the profits. Entitlement to profits/reserves: The articles of association can provide that shares of a certain class or specification shall give no or only limited entitlement to profits and reserves. To include such provision in the articles of association shall require the consent of all holders of shares whose rights the amendment of the articles of association is detrimental to. In respect of shares with no or only limited entitlement to profits and reserves: In order for a share with no entitlement to profits and reserves at all to qualify as a share, voting rights must be attached to it. Pre-emptive rights upon issuance of shares: Holders of shares with no entitlement to profits and reserves do not have pre-emptive rights upon issuance of shares and shareholders do not have pre-emptive rights upon issuance of shares with no entitlement to profits and reserves, unless the articles of association provide otherwise. 7

8 Share transfer restrictions, rights of first refusal system: Holders of shares with no entitlement to profits and reserves will as a main rule only be offered shares with no entitlement to profits and reserves, unless the articles of association provide otherwise. Compensation upon conversion, statutory merger or statutory demerger: Upon conversion of a BV into an NV, each holder of shares with no entitlement to profits who has not consented to the resolution to convert the BV into an NV, can file a request for compensation. If, upon a statutory merger or statutory demerger, the acquiring company or the group company granting shares is not a BV, each holder of shares with no entitlement to profits who voted against the proposal to effect the statutory merger of demerger can file a request for compensation. Repurchase Articles of association: Articles of association must specifically provide that shares can be repurchased. Limitation on the number of shares that can be repurchased: A maximum of 50% of the issued capital can Articles of association: Articles of association no longer have to specifically provide that shares can be repurchased. The articles of association can exclude or limit the possibility to repurchase shares. Limitation on the number of shares that can be repurchased: At least one share with voting rights shall 8

9 be repurchased. be held by a person other than and other than for the account of the BV or one of its subsidiaries. Balance sheet test: Repurchase of shares is only allowed insofar as the amount of the BV s equity, less the acquisition price, exceeds the aggregate of the paid and called up part of the capital and the reserves which must be maintained pursuant to the laws of the Netherlands or the articles of association. The validity of the acquisition shall be decided on the basis of the amount of equity appearing from the last adopted balance sheet. Repurchase of shares shall not be permitted if more than six months have elapsed after the end of a financial year without the annual accounts having been adopted. Balance sheet test and distribution test: Balance sheet test: Repurchase of shares is only allowed insofar as the amount of the BV s equity, less the acquisition price, exceeds the aggregate of the reserves which must be maintained pursuant to the laws of the Netherlands or the articles of association. Distribution test: The management board must assess whether the BV will after the repurchase still be able to continue to pay its payable debts. See hereinafter under Authority. Authority: The management board is authorised to adopt a resolution to repurchase shares. Authority: The management board is authorised to adopt a resolution to repurchase shares. The 9

10 management board shall not resolve that the BV shall repurchase shares if it knows or should reasonably foresee that the BV will after the repurchase no longer be able to continue to pay its payable debts. Period of foreseeability: the customary period for what a person should know or should reasonably foresee is one year. The management board of a BV must consent to an acquisition of shares in the capital of that BV by a subsidiary in order for such acquisition to be valid. The statutory rules on a repurchase of shares shall apply to an acquisition of shares in the capital of a BV by a subsidiary. Managing directors of the BV will only be liable to the BV (and not to the relevant subsidiary also) for a deficit, if any (see hereinafter under Liability ). The repurchase must be authorised by the general meeting (or other corporate body as designated in the articles of association or by the general meeting). No longer required that the general meeting authorises the repurchase as well. The articles of association can provide otherwise. Sanctions: Nullity: A repurchase in violation of the statutory rules shall be null and void. Sanctions: Nullity: A repurchase at the expense of reserves which must be maintained pursuant to the laws of the Netherlands or the articles of association or in violation of an exclusion or a limitation of the possibility to repurchase shares provided for in the articles of association shall be null and void. 10

11 Liability: Liability: The managing directors will be jointly liable to a transferor who is in good faith and who suffers damages as a result of the nullity of a repurchase. Unchanged: The managing directors will be jointly liable to a transferor who is in good faith and who suffers damages as a result of the nullity of a repurchase. The managing directors/actual policymakers will be jointly liable for the deficit resulting from the repurchase, with the statutory interest accrued from the day of the repurchase, if the BV after the repurchase is no longer able to continue to pay its payable debts and the managing directors/actual policymakers should have known or foreseen that at the time of the repurchase. Possibility of exculpation for managing director/actual policymaker who proves that he cannot be blamed for the fact that the repurchase has been effected and that he has not been negligent in taking measures to avert the consequences. The transferor of the shares who is not in good faith must reimburse the deficit up to a maximum of the amount or the value of the acquisition price received by him, with the statutory interest accrued from the day of the repurchase. If managing directors/actual policymakers have paid 11

12 the amount due, the transferor of the shares must make the reimbursement to the managing directors/actual policy makers, in proportion. Reduction of issued capital Cancellation of shares: All shares held by the BV or for which the BV holds the depositary receipts. All shares of a certain class, with the consent of all holders of the relevant class of shares or provided it has been stipulated in the articles of association prior to the issuance of such shares that they can be cancelled with repayment. Limitation on the number of shares that can be cancelled: The issued capital cannot be reduced below the required minimum capital and at least 20% of the authorised capital must be issued. Procedure for raising objection: A resolution to effect a capital reduction must be deposited at the Dutch Trade Register and the deposit must be announced in a nationally distributed newspaper. During two months after the announcement, each creditor of the BV can raise objection to the resolution to effect the capital reduction. A resolution to effect a capital reduction will only take effect if no objection was raised or, if objection was raised timely, if such objection was withdrawn or the termination of the objection is enforceable. Cancellation of shares: All shares held by the BV or for which the BV holds the depositary receipts. All shares of a certain class or specification, provided it has been stipulated in the articles of association prior to the issuance of such shares that they can be cancelled with repayment. Individual shares, with the consent of the shareholder(s) concerned. Limitation on the number of shares that can be cancelled: At least one share with voting rights shall be held by a person other than and other than for the account of the BV or one of its subsidiaries. Procedure for raising objection no longer exists. Instead, the rules on management board approval, the rules on the balance sheet test and the distribution test and the rules on liability, as are applicable to distributions on shares, also apply to capital reduction with repayment. See under Distributions, under Balance sheet test and distribution test, under Authority and under Sanctions, Liability. The provisions on the balance sheet test, as applicable in respect of distributions on shares, also apply to a capital reduction with discharge from the 12

13 obligation to pay for shares. Transitional law: If a resolution to reduce a BV s issued capital was adopted before the new rules entered into force, the old rules will remain applicable to such capital reduction (regardless whether the resolution was already deposited at the Dutch Trade Register at the time the new rules entered into force). Nachgründung Certain formalities (approval general meeting, description of property to be acquired, accountant s certificate) must be met in case of acquisition of property by a BV within two years after registration of that BV with the Dutch Trade Register, in case the relevant property belonged to an incorporator or shareholder of the BV a year before incorporation of the BV or after that. Rule is cancelled. Note: The general rules that apply to acting by the management board and management board liability, such as the rules on proper fulfilment of duties and actio pauliana, remain applicable. Financial assistance It is prohibited to provide financial assistance by giving security or guaranteeing the price with a view to a subscription for or an acquisition of shares by third parties. Rule is cancelled. Note: The general rules that apply to acting by the management board and management board liability, such as the rules on proper fulfilment of duties and conflict of interest, remain applicable. Loans with a view to a subscription for or an acquisition of shares by third parties may only be granted up to an amount of the freely distributable reserves, provided the articles of association allow for such loans to be granted. 13

14 Share transfer restrictions, shareholder obligations Share transfer restrictions Transferability: It is prohibited to freely transfer shares. The articles of association must provide for share transfer restrictions for any transfer of shares (can be a prior approval system, a rights of first refusal system of a combination of both). One exception to this rule is the possibility to freely transfer shares to a certain - limited - group of persons as defined by law (see hereinafter under Group of persons to which shares can be freely transferred ). Transferability: The prohibition to freely transfer shares no longer exists. Options in respect of share transfer restrictions: Applicability of the statutory rights of first refusal system, and applicability of the statutory provisions on price determination (this will apply if the articles of association do not provide otherwise). Exclusion of transferability for a certain period of time. To introduce such provision in the articles of association will require the consent of all holders of shares to which the exclusion of transferability shall apply. Another system to restrict the transferability of shares than referred to above, possibly with provisions on price determination that deviate from the statutory provisions. Free transferability. Court declaring the share transfer restrictions inapplicable: In case of executor attachment, bankruptcy, statutory debt restructuring scheme for an individual, issuance of a bequest, allocation from a community of property or a right of pledge, the court can declare the statutory rights of first refusal system or the provisions in the articles of association in relation to transferability of 14

15 shares wholly or partly inapplicable. The court will only grant a request thereto if the interests of the applicant require so particularly and the interests of other parties will not be affected disproportionately. Determination of price: A shareholder who so wishes is entitled to receive a price, equal to the value of his share(s), set by one or more independent experts. Group of persons to which shares can be freely transferred: Statutory provision providing that shares can be freely transferred to a certain - limited - group of persons (spouse or registered partner, relations by blood or affinity in the ascending or descending line without limitation and in the collateral line to the second degree, a co-shareholder and the BV itself). Determination of price: The statutory price determination system remains unchanged. The share transfer restrictions included in the articles of association can provide for another system to determine the price, but such provision in the articles of association cannot be imposed on a shareholder against his will. Group of persons to which shares can be freely transferred: This provision is cancelled. It will be possible to define a group of persons to which shares can be freely transferred in the articles of association (no statutory limitations applicable anymore). Obligations Obligations, other than the obligation to pay the nominal value for a share, can not be imposed on a shareholder against his will, not even by amendment of the articles of association. Transitional law: If a transfer of shares will be effected after the new rules have entered into force, such shares can still be freely transferred to the group of persons to which shares could be freely transferred under the old rules, provided the shares were offered for transfer before the new rules entered into force. The articles of association can, with respect to all shares or shares of a certain class or specification, provide that undertakings under the law of obligations, towards the BV or third parties or between shareholders, are 15

16 attached to being a shareholder. Such obligations, as well as an obligation to meet certain qualification criteria or an obligation to offer and transfer shares, cannot be imposed on a shareholder against his will. Binding force in respect of new shareholder: A new shareholder shall as a main rule be bound to an obligation as laid down in the articles of association. However: if a transfer of shares by a shareholder who is not bound by the relevant obligation is impossible or extremely difficult, the relevant shareholder can request that the BV shall designate interested parties to whom he can transfer all his shares pursuant to a provision laid down in the articles of association. If the BV has not designated such interested parties within a certain period of time, the shareholder can transfer his shares to another party and in such case that other party will also not be bound to the obligation. Entering into force of or exemption from obligation: The articles of association can determine that the entering into force of a provision imposing an obligation on (a) shareholder(s) shall depend on the adoption of a resolution by a corporate body designated thereto in the articles of association and that a corporate body designated thereto in the articles of association can grant 16

17 an exemption from such obligation. Determination of the price in case of an obligation to offer and transfer shares: A shareholder who so wishes is entitled to receive a price, equal to the value of his share(s), set by one or more independent experts. Determination of the price in case of an obligation to offer and transfer shares: The statutory price determination system remains unchanged. The share transfer restrictions included in the articles of association can provide for another system to determine the price, but such provision in the articles of association cannot be imposed on a shareholder against his will. Voting rights and depositary receipts Flexible voting rights Main rule: Each shareholder shall have at least one vote, and the number of votes that a shareholder is entitled to cast shall be proportionate to his entitlement to the issued share capital. Unchanged. Deviation from the main rule, such as a system of degressive voting rights or a system of absolute limited voting rights are in principle - to a limited extent - allowed. It is possible to include a provision in the articles of association that deviates from the main rule. Such rule will then apply to every resolution to be adopted by the general meeting; it is not possible to differentiate voting rights for different types of resolutions. A resolution to amend the articles of association as a result of which the voting rights will be amended can only be adopted by unanimous vote in a meeting where the entire issued capital of the BV is represented. Non-voting shares Not applicable. The articles of association can, in respect of all shares of a certain class or specification, provide that no voting 17

18 rights in the general meeting are attached to them. Such provision in the articles of association can only be included with the consent of all holders of shares of the relevant class or specification or if it has been stipulated in the articles of association prior to the issuance of the relevant shares that no voting rights will be attached to them. Note: Holders of non-voting shares do have meeting rights. In addition, non-voting shares must have (at least some) entitlement to profits and reserves in order to qualify as a share. In the articles of association and in the shareholders register of the BV, shares to which no voting rights are attached shall be referred to as non-voting shares. Non-voting shares shall not be taken into account when determining to what extent shareholders vote, are present or represented, or to what extent the share capital is provided or represented. The laws of the Netherlands state some exemptions to this main rule. Pre-emptive rights upon issuance of shares: Holders of non-voting shares do not have pre-emptive rights upon issuance of shares and shareholders do not have preemptive rights upon issuance of non-voting shares, unless the articles of association provide otherwise. Share transfer restrictions, rights of first refusal system: Holders of non-voting shares will as a main rule only be offered non-voting shares, unless the articles of 18

19 association provide otherwise. Compensation upon conversion, statutory merger or statutory demerger: Upon conversion of a BV into an NV, each holder of non-voting shares who has not consented to the resolution to convert the BV into an NV, can file a request for compensation. If, upon a statutory merger or statutory demerger, the acquiring company or the group company granting shares is not a BV, each holder of nonvoting shares can file a request for compensation. Depositary receipts and meeting rights Distinction is made between depositary receipts issued with a BV s cooperation and depositary receipts issued without a BV s cooperation. It can be unclear whether a depositary receipt was issued with a BV s cooperation. It is relevant to know whether a depositary receipt was issued with a BV s cooperation as certain rights, such as meeting rights and the right to receive certain information, accrue to holders of depositary receipts issued with a BV s cooperation. The distinction between depositary receipts issued with a BV s cooperation and depositary receipts issued without a BV s cooperation no longer exists. Instead, distinction will be made between depositary receipts to which meeting rights are attached and to which meeting rights are not attached. Statutory definition of meeting rights : The right to, either in person or by written proxy, attend the general meeting and to speak therein. The uncertainty whether a depositary receipt was issued with a BV s cooperation or not no longer exists: meeting rights can only be attached to depositary receipts if the articles of association provide for that. The rights accruing to holders of depositary receipts to which the meeting rights are attached are equal to the 19

20 rights that under the old rules accrued to holders of depositary receipts issued with a BV s cooperation. Provisions in the articles of association, two options: The articles of association provide that meeting rights are attached to depositary receipts. A provision in the articles of association that meeting rights are attached to depositary receipts can only be amended with the consent of the holders of depositary receipts concerned, unless the authority to amend the relevant provision was expressly stipulated in the articles of association at the time the meeting rights were granted. The articles of association provide that the decision to grant and take away meeting rights shall be made by a corporate body, designated thereto in the articles of association. Acknowledgement/serving of deed of transfer: The meeting rights can only be exercised by a holder of depositary receipts after the BV has acknowledged the transfer of the relevant depositary receipts or after the deed of transfer of the relevant depositary receipts has been served upon it. Shareholders register: The data of the holders of depositary receipts to which the meeting rights are attached must be entered into the shareholders register. 20

21 General Meeting Transitional law: The BV must as soon as possible, but ultimately within one year after the new rules have entered into force have recorded the holders of depositary receipts that were issued with the BV s cooperation in its shareholders register, stating that they are holders of depositary receipts to which the meeting rights are attached. Until this has been done, notice of general meetings must be given to the relevant holders of depositary receipts in accordance with the old rules, see under General Meeting, under Convocation, Form of convocation. With the first amendment of the articles of association following the entering into force of the new rules, a provision should be included in the articles of association to the effect that meeting rights are attached to depositary receipts that were issued with the BV s cooperation prior to the entering into force of the new rules. Annual Meeting During each financial year at least one general meeting shall be held, within six months after the end of the financial year. During each financial year at least one general meeting shall be held or at least one resolution shall be adopted without holding a meeting. 21

22 Convocation Annual accounts and release from liability: In practice is it assumed that the annual accounts will be adopted by a resolution adopted in the annual general meeting. Adoption of the annual accounts will not automatically result in release from liability being granted, a separate resolution is required thereto. Authorisation to convene a meeting: Shareholders, alone or jointly representing in the aggregate at least one-tenth of the issued capital, may request the court to be authorised to Annual accounts and release from liability: The annual accounts can be adopted by a resolution adopted in a general meeting or by a written resolution, adopted without holding a meeting. Adoption of the annual accounts will not automatically result in release from liability being granted, a separate resolution is required thereto. If all shareholders of a BV are also managing directors of that same BV, signing of the annual accounts by all managing directors and supervisory directors shall also be considered as adoption of the annual accounts (provided all other persons with meeting rights have been given the opportunity to consider the prepared annual accounts and have consented to this way of adoption), and shall result in a release of the managing directors from liability for the management pursued and a release of the supervisory directors from liability for their supervision. Note: All managing directors and all supervisory directors must sign. The rule that if the signature of one or more of them is missing this shall be stated and reasons for this omission shall be given, does not apply in this case. Authorisation to convene a meeting: Shareholders, alone or jointly representing in the aggregate at least onehundredth of the issued capital, may request the court to 22

23 convene a general meeting. The request to the court must be preceded by a request to the management board and the supervisory board, who subsequently did not see to it that a general meeting could be held within six weeks after the request was made. be authorised to convene a general meeting. The request to the court must be preceded by a request to the management board and the supervisory board, who should then see to it that a general meeting can be held within four weeks after the request was made, unless important interests of the BV dictate otherwise. Convocation period Form of convocation: A notice convening the meeting shall be sent to the addresses of the shareholders shown in the BV s shareholders register. In respect of holders of depositary receipts issued with the BV s cooperation, notice must be given in a nationally distributed newspaper, unless the articles of association provide otherwise. Content convocation not complete: Valid resolutions of the general meeting in respect of items that were not included in the convocation with due observance of the convocation period may only be adopted by unanimous vote in a meeting where the entire issued capital of the BV is represented. Minimum period for convening a general meeting is fifteen days prior to the day of the meeting. Form of convocation: A notice convening the meeting shall be sent to the addresses of the shareholders and the other persons with meeting rights (pledgees, usufructuaries and holders of depositary receipts, to which the meeting rights accrue) shown in the BV s shareholders register. Content convocation not complete: Valid resolutions of the general meeting in respect of items that were not included in the convocation with due observance of the convocation period may only be adopted if all persons with meeting rights have consented to the decisionmaking taking place and the managing directors and the supervisory directors have been given the opportunity to give advice prior to the decision-making. Minimum period for convening a general meeting is shortened to eight days prior to the day of the meeting. Transitional law: The new statutory convocation period applies to all meetings held from the moment the new rules enter into force. 23

24 Note: If the articles of association state the convocation period in days, the period stated in the articles of association should be observed. Place general meeting If the convocation period was not observed or if no notice convening the meeting was sent at all, valid resolutions of the general meeting may only be adopted by unanimous vote in a meeting where the entire issued capital of the BV is represented. General meetings are held in the Netherlands, in the place stated in the articles of association or, if the articles of association do not state anything, in the municipality in which, according to the articles of association, the BV has its official seat. In a general meeting held elsewhere valid resolutions may only be adopted if the entire issued capital of the BV is represented. If the convocation period was not observed or if no notice convening the meeting was sent at all, valid resolutions of the general meeting may only be adopted if all persons with meeting rights have consented to the decision-making taking place and the managing directors and the supervisory directors have been given the opportunity to give advice prior to the decision-making. General meetings are held in the place stated in the articles of association or, if the articles of association do not state anything, in the municipality in which, according to the articles of association, the BV has its official seat. The place stated in the articles of association can also be a place outside the Netherlands. In a general meeting held elsewhere valid resolutions may be adopted, provided that all persons with meeting rights have consented to the place of the meeting and the managing directors and the supervisory directors have been given the opportunity to give advice prior to the decision-making. A resolution to amend the articles of association, such that a provision shall be included that general meetings can be held in a place outside the Netherlands, may only be adopted by unanimous vote in a meeting where the entire issued capital of the BV is represented and provided all persons with meeting rights have consented 24

25 to the amendment of the articles of association. Adoption of resolutions without holding a meeting Amendment of articles of association Only possible if the articles of association expressly allow for resolutions to be adopted without holding a meeting. Not allowed if in respect of the BV there are persons to whom the rights conferred by the laws of the Netherlands upon holders of depositary receipts issued with a BV s cooperation accrue. Shareholders may adopt resolutions of the general meeting without holding a meeting, provided they are adopted by unanimous vote of all shareholders entitled to vote. The votes must be cast in writing. It is no longer required that the articles of association expressly allow for resolutions to be adopted without holding a meeting. Adoption of resolutions without holding a meeting is also allowed if there are persons with meeting rights, other than just the shareholders, provided with due observance of the statutory requirements. In order for a resolution of the general meeting adopted other than in a meeting to be valid, it is required that all persons with meeting rights have consented to this manner to adopt a resolution and that the managing directors and the supervisory directors have been given the opportunity to give advice prior to the decisionmaking. If these requirements are met, the resolution can be adopted by the majority required pursuant to the laws of the Netherlands or the articles of association, so unanimity is not always required. The votes must be cast in writing. Detrimental to rights: A resolution to amend the articles of association that is specifically detrimental to any right of holders of shares of a certain class or specification requires a resolution of the relevant group of shareholders granting approval for such amendment, unless the authority to amend the relevant provision was expressly stipulated in the relevant provision in the articles of association at the time the relevant right was 25

26 granted. This applies without prejudice to any other requirement to obtain consent for such amendment pursuant to the laws of the Netherlands. Unanimous votes required, entire issued capital represented: Resolution to amend the articles of association, such that a provision shall be included that general meetings can be held in a place outside the Netherlands. Resolution to amend the articles of association as a result of which the provisions on voting rights will be amended. Resolution to amend the articles of association, such that a provision shall be included that managing directors/supervisory directors can be appointed by a meeting of holders of shares of a specific class or specification, instead of by the general meeting. Resolution to amend the articles of association, such that a provision shall be included that supervisory board directors can be pointed by a third party. 26

27 Consent required of shareholders/holders of depositary receipts concerned: Including provision in articles of association on exclusion of transferability of shares for a certain period of time. Including provision in articles of association entailing that discharge from the obligation to pay for shares or repayment on shares upon a capital reduction can occur only with respect to shares of a certain class or specification and not only in respect of all shares (consent is not required if such provision was already included in the articles of association before issuance of the shares of the relevant class or specification). Including provision in articles of association that deviates from the main rule that for the computation of the amount to be distributed on each share, only the amount of the obligatory payments on the nominal value of the shares shall be taken into account. Including provision in articles of association that shares of a certain class or specification shall give no or only limited entitlement to profits and reserves. Amendment of provision in the articles of association that meeting rights are attached to depositary receipts (consent is not required if the authority to amend the relevant provision was 27

28 Management Board expressly stipulated in the articles of association at the time the meeting rights were granted). The same applies to amendment of provisions on meeting rights accruing to pledgors and usufructuaries. Including provision in articles of association that no voting rights in the general meeting are attached to all shares of a certain class or specification (no consent required if it has been stipulated in the articles of association prior to the issuance of the relevant shares that no voting rights will be attached to them). Shareholders not bound against their will: Including provision in articles of association that, with respect to all shares or shares of a certain class or specification, undertakings under the law of obligations, towards the BV or third parties or between shareholders, are attached to being a shareholder. Including provision in articles of association that deviates from statutory price determination system. Instruction right The articles of association may provide that the management board must comply with instructions regarding the general lines of the policy fields as further specified in the articles of association, to be given by another corporate The articles of association may provide that the management board must act in accordance with specific instructions of another corporate body. The management board must comply with the instructions, unless they are 28

29 body. not in accordance with the interests of the BV and the business connected with it. Appointment Binding nomination Suspension and dismissal Authority: Managing directors are appointed by the general meeting. Note: This does not apply to a company to which the full large company regime applies: for such companies the managing directors are appointed by the supervisory board. A binding nomination must consist of at least two candidates for each vacancy. A managing director can always be suspended or dismissed by the person authorised to appoint the relevant managing director. Authority: As a main rule, managing directors are appointed by the general meeting. It is however possible to provide that managing directors are appointed by a meeting of holders of shares of a specific class or specification, provided that each shareholder entitled to vote can take part in the decision-making with respect to the appointment of at least one managing director. A resolution to amend the articles of association as a result of which a provision as referred to in the previous full sentence will be included in the articles of association can only be adopted by unanimous vote in a meeting where the entire issued capital of the BV is represented. Note: This does not apply to a company to which the full large company regime applies: for such companies the managing directors are appointed by the supervisory board. The requirement that a binding nomination must consist of at least two candidates for each vacancy, is cancelled. If a nomination comprises of one candidate for the vacancy, a resolution on the nomination will result in the relevant person being appointed, unless it has been resolved that the nomination shall not be binding. A managing director can always be suspended or dismissed by the corporate body authorised to appoint the relevant managing director. The articles of 29

30 association can provide that a managing director can also be dismissed by another corporate body. Vacancy or inability to act Supervisory Board Appointment Note: This does not apply to a company to which the full large company regime applies: for such companies the managing directors are suspended and dismissed by the supervisory board. The articles of association must include a provision for the situation where a seat on the management board is vacant or managing directors is/are unable to perform his/their duties. Authority: Supervisory directors are appointed by the general meeting. Note: Specific rules apply to companies to which the large Note: This does not apply to a company to which the full large company regime applies: for such companies the managing directors are suspended and dismissed by the supervisory board. The articles of association must include a provision for the situation where a seat on the management board is vacant or one or more managing directors is/are unable to perform his/their duties. The articles of association can further specify when a managing director is deemed unable to perform his duties. Authority: As a main rule, supervisory directors are appointed by the general meeting. It is however possible to provide that supervisory directors are appointed by a meeting of holders of shares of a specific class or specification, provided that each shareholder entitled to vote can take part in the decision-making with respect to the appointment of at least one supervisory director. A resolution to amend the articles of association as a result of which a provision as referred to in the previous full sentence will be included in the articles of association can only be adopted by unanimous vote in a meeting where the entire issued capital of the BV is represented. Note: Specific rules apply to companies to which the 30

31 company regime applies. large company regime applies. Binding nomination Suspension and dismissal Vacancy or inability to act A binding nomination must consist of at least two candidates for each vacancy. A supervisory director can always be suspended or dismissed by the person authorised to appoint the relevant supervisory director. Note: Specific rules apply to companies to which the large company regime applies. The requirement that a binding nomination must consist of at least two candidates for each vacancy, is cancelled. If a nomination comprises of one candidate for the vacancy, a resolution on the nomination will result in the relevant person being appointed, unless it has been resolved that the nomination shall not be binding. A supervisory director can always be suspended or dismissed by the person authorised to appoint the relevant supervisory director. The articles of association can provide that a supervisory director can also be dismissed by the general meeting. Note: Specific rules apply to companies to which the large company regime applies. The articles of association must include a provision for the situation where a seat on the supervisory board is vacant or one or more supervisory directors is/are unable to perform his/their duties. The articles of association can further specify when a supervisory director is deemed unable to perform his duties. Transitional law: With the first amendment of the articles of association following the entering into force of the new rules, a provision on vacancy or inability to act for supervisory directors should be included in the articles of association. 31

32 Transitional law General rules Main rule: Immediate effect. In respect of existing rights the new rules will not have retroactive effect, no new rights will be created as a result of the new rules entering into force. Reference to old statutory rules/repetition of the wording of old statutory rules in articles of association: Reference in the articles of association to a statutory rule or repetition of the wording of a statutory rule that is no longer effective upon the new statutory rules entering into force, will be deemed to be a reference to the new statutory rule or repetition of the wording of the new statutory rule, unless that would not be in accordance with the purpose of the relevant provision in the articles of association. As a result, various provisions in the articles of association will need interpretation, and in order to do so the literal wording of the provision will be given great weight. Meaning will be given to the fact that reference to or repetition of the wording of a statutory rule is often only included to enhance the userfriendliness of the articles of association. But it may have been the intention of parties to keep the old rule included regardless of what the new rules say. In legal literature the general view seems to be that reference to or repetition of statutory provisions on capital protection will hardly ever have been included to have a meaning other than enhancing user-friendliness of the articles of association. This is different for provisions on authority of corporate bodies. It can be concluded that it is recommendable to amend the articles of association after the new rules have entered into force, in order to enhance legal certainty. Pending legal proceedings: The new rules will as a main rule not affect the authority of the court, the nature of the proceedings and the available legal remedies. Validity of legal acts performed under the old rules: Valid and inviolable under the old rules: A legal act that was valid and inviolable under the old rules will remain the same under the new rules, even if the relevant legal act would be null and void or voidable under the new rules. Voidable under the old rules: A legal act that was voidable under the old rules will become valid and inviolable under the new rules if the legal act would be valid and inviolable under these new rules. 32