October - November 2012 - Association of Dutch Businessmen

know your tax
THE FLEXIBILISATION OF ‘B.V.’ LAW
Text Raymond Hofstede, Loyens & Loeff, Singapore
Introduction
Many entrepreneurs worldwide carry on a business in
the form of a Dutch private company with limited liability.
In Dutch, the ‘besloten vennootschap met beperkte
aansprakelijkheid’ is usually referred to as the B.V. As
from autumn of this year, the rules for the B.V., with
respect to the protection of capital, will be simplified and
the governance structure of the articles of association
will become more flexible. The Act on simplification and
flexibilisation of private limited liability companies (the
‘Act’) will come into force on 1 October 2012, and will
apply to all B.V.s (hereafter referred to as “FlexBV”). This
article aims to summarise some key changes.
Non-voting shares and non-profit shares
The Act allows the articles of association of the company to
exclude certain shares from voting (1) , thereby making it far
easier to allocate voting rights to individual shareholders
separately. The company will also be able to issue shares
with more than one vote, which could be conducive to
structuring joint ventures or family owned companies.
Furthermore, the FlexBV gives the opportunity to create
shares with a right to vote, but without an entitlement
to profits or reserves (i.e. non-profit shares). As a result
of all these changes, shareholders will be more flexible in
structuring their mutual relationship.
Shareholders resolutions and general meetings
The Act also provides for some amendments in the
provisions on decision-making by the general meeting of
shareholders. Under the Act, it will be possible to have
general meetings of shareholders outside the Netherlands.
Decision-making outside a meeting will be allowed in
more cases and will no longer require a unanimous vote
of all shareholders. The statutory deadline for convening
a shareholders’ meeting will be shortened from fifteen to
eight days before the date of the meeting.
Direct rights of appointment
Under the Act, it is possible to grant a direct right to the
meeting of holders of shares of a certain class or specified
number to appoint or dismiss one or more management
board members. A condition for the application of the
direct right of appointment is that every shareholder
with voting rights, directly or indirectly, may vote on
the appointment of at least one management board
member. As a result, the articles of association may allow
a shareholder to appoint, suspend and dismiss its “own”
managing or supervisory director.
Instructions to the management board
With the FlexBV, the articles of association can provide
that the management board shall act according to the
instructions (2) of the general meeting of shareholders
or another corporate body. The management board is
obliged to follow these instructions, but will retain its own
responsibility as management board. It may (and must)
refuse to follow instructions if doing so is contrary to the
interest of the company and the business related thereto.
Transfer restrictions optional
With respect to the private character of the B.V., a
remarkable change has been implemented: including
transfer restrictions contained in the articles of association
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