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Editorial

New Corporate Law Legislation

In the field of corporate law, there are four (coming) Acts that attract attention, namely the introduction of the tenth book of the Dutch Civil Code, the amendment of the Marital Property Act and, to conclude, the coming entry into effect of the Management and Supervision Act and the Flexibilization of BV Act. Please find below a short explanation of each Act.

Dutch Civil Code Book 10
As of 2012 a new Book 10 of the Dutch Civil Code has entered into effect. Book 10 contains the codification of the most important aspects of Dutch international private law. The most prominent is the so-called conflict of laws. These are rules by means of which the applicable law to an international legal relationship is determined. Until the introduction of Book 10, the conflict of law rules were placed in a separate act per subarea. The codification amounts to more than just the combination of separate acts. The regulations have also been fine-tuned, as a result of which a consolidated Act has been created.

The Amendment of the Marital Property Act
On 1 January 2012 matrimonial property law has also been radically amended. Important for corporate law is the introduction of a new remuneration scheme in case a spouse privately uses money from the marital property or the private capital of the other spouse for the acquisition of goods. Under the former law, the latter spouse would acquire a right to compensation amounting to the nominal value of the good, unless this would be unacceptable according to the standards of reasonableness and fairness. The new matrimonial property law starts from the value of the good acquired at the time when the compensation must be paid.

The short example below shows that without further arrangements the consequences of the new matrimonial property law for married entrepreneurs could be radical. In this example, the spouses are married with joint ownership of goods. The wife wants to start her own business and incorporates a BV (a private limited company). The money (EUR 18,000) for the pay-up of the shares is paid fully out of the private capital of the husband. Thanks to the efforts of the wife business is flourishing and the profits are always added to the general reserves of the BV. When the marriage ends, the shares are worth EUR 1,500,000. Where first the husband would be entitled to EUR 18,000, under the new law he now has a claim against the wife of EUR 1,500,000. The contesting of this right to compensation is extremely difficult. The wife has to prove why it is unacceptable that the husband may exercise his right to compensation.

A different problem is the valuation. In the above-mentioned example, it is relatively simple to determine the value of the shares. Critics of the right to compensation point out that this is the exception to the rule and that there are innumerable situations imaginable which will cause the judges and attorneys a lot of headaches. Therefore, now, more than ever the advice to married entrepreneurs is to make clear written agreements regarding rights of compensation. If you want more information, please contact Viola van der Meer: viola.van.der.meer@kvdl.nl

Entry into Force of the Management and Supervision Act (and Remedial Act)
In 2012 the Management and Supervision Act will enter into effect, inter alia. The bill had already been adopted by the Dutch Senate in May 2011. It was therefore expected that the Act would enter into effect as of 1 January 2012, but the Minister of Justice let it be known in response to questions in Parliament that the new target date is 1 July 2012 is. The postponement has been caused by the debate about a Remedial Act, with which the Minister tries to take away the objections against and criticism on the Act.

The bill of the Remedial Act contains a number of clarifications regarding the limitation of the number of supervisory positions of directors and supervisory directors in large companies. The Remedial Act intends to clarify which supervisory positions are counted in and which are not, when there is a large company and decisions taken by a director/supervisory director with more than the number of positions allowed cannot be affected for this reason.

For more information on the Management and Supervision Act go to here.

Simplification and Flexibilization of BV Law
Many have written elaborately about the flexibilization of BV law. At this moment, the bill Flex BV, together with the bill Flex BV Implementation Act, are under debate in the Senate. After completion of the preparatory investigation into both bills, on 21 December 2011 the Senate concluded its preliminary report containing remarks and questions to the Minister. Furthermore, on 27 December 2011 the Lower House of Parliament voted on a number of amendments, as a result of which the bill Flex-BV Implementation Act has been adjusted on some minor points or has been improved. Last year, the Minister mentioned 1 January 2012 as the date for the entry into force of both bills. It is expected that this will be 1 July 2012.


For more information please visit www.kvdl.nl

 

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