Flex BV Legislation To Enter Into Force On 1 October 2012

Flex BV legislation

The Dutch Minister of Security and Justice announced today that the legislation simplifying the rules on Dutch private limited liability companies ("Flex BV Act") will enter into force on 1 October 2012. This legislation will offer a large degree of flexibility in the governance structure of this type of company.

The main changes under the new rules are, in short, as follows:

• The rules on capital protection and the protection of creditors – including the rules on share buybacks, financial assistance and distributions to shareholders – will become more flexible.
• Distributions to shareholders will be made dependent on a test to be applied in advance; management board members and the recipients of a distribution may be liable for compensation if they do not act in good faith.