Effective as of October 1st, 2012, a new Dutch Bill makes laws governing Private Limited Liability Companies simpler and more flexible. A Dutch private limited liability company is referred to as a “BV”. The Bill will give more freedom and flexibility to tailor the articles of association in accordance with the needs of the BV’s shareholders.
The so called “Flex-BV” Bill enacts the following changes:
- Abolishment of the required minimum capital of EUR 18,000
- New flexibility of rules with respect to share buybacks, financial assistance and distributions to shareholders
- Abolishment of required auditor’s statement when shares are paid for in kind upon incorporation
- The nominal value of shares can now be in an a currency other than Euro
- The division of voting rights between individual shareholders will be more flexible
- Allowance for the creation of non-voting shares and shares without profit rights via the articles of association
- Payments to shareholders, including purchase of own shares and capital reductions must be approved by the BV’s board of directors
- The possibility of paying out the BV’s entire equity to the shareholders – with the exception of the reserves required to be maintained under its articles of association
- The board of directors shall refuse approval of payments if the BV will be unable to pay its due and payable debts, otherwise the board will be liable towards the BV for any deficits
- Shareholders resolutions may be adopted outside a meeting
- Shareholders meetings may be held outside of the Netherlands
- Possibility of each shareholder to directly appoint and dismiss one or more directors
- Transfer restriction clauses are no longer mandatory
- More flexibility in the details regarding transfer restrictions, if included
- Lock-up provisions will now be possible
- Rules regarding dispute resolution will be more flexible and efficient for all parties
These are among the changes coming into effect in October which will benefit those seeking to create a private limited liability company in the Netherlands. The new law does not mandate any amendments to the articles of association of existing BV. It is however advised to review the articles of association in order to ascertain if any amendments will be necessary or beneficial.
Corporate Services Department
Oracle Capital Group
