Corporate Law Overview 2023

This article provides an overview on various (possible) developments and points for attention in the field of corporate law in 2023.

Proposed end to provisions under the Temporary COVID Act

The Tijdelijke wet COVID-19 Justitie en Veiligheid (Temporary COVID-19 Justice and Security Act) entered into force on 24 April 2020. This Act has since been extended, each time by two months, most recently until 1 February 2023. Under the Temporary COVID-19 Act, the management board (rather than the general meeting) of a public or private limited liability company (BV or NV) may decide to extend the deadline for preparing the financial statements, and general meetings may be held digitally.

On 5 December 2022, Franc Weerwind, the Minister for Legal Protection, informed the Lower House in a letter that the government intended not to extend most of the provisions of the Temporary COVID-19 Act after 1 February 2023. That would mean that the general meeting would again have to decide on an extension of the deadline for preparing the financial statements, and that general meetings would have to take place physically (in the absence of an arrangement in the articles of association).

Investment, Mergers and Acquisitions Security Screening Act

On 17 May 2022, the Investments, Mergers and Acquisitions Security Screening Act (the “Act”) was adopted by the Upper House. The Act introduces a security test for investments, mergers and acquisitions that may present a risk to national security. The security test applies to two types of companies in the Netherlands: vital providers and companies with sensitive technology. The reason for this is that investments, mergers and acquisitions in these types of companies may give rise to risks to national security.

Investors in vital providers and companies with sensitive technology, as well as the companies themselves, must report changes of control to the Bureau Toetsing Investeringen (Investment Screening Bureau). This bureau assesses risks to national security. If such a risk is established, conditions may be attached to the investment, which, in extreme cases, may even be banned.

It is not yet known if and when the Act will enter into force.

Online incorporation of a BV

The European legislature has prepared a directive to make it possible to incorporate a BV online in European Member States. It is also apparent from the directive that starting up an economic activity must be made simpler, faster and more efficient, by using digital tools and processes. Comprehensive and accessible information on companies must also be provided.

The Dutch legislature has yet to implement this directive in Dutch law. The bill is currently pending before the Lower House. It provides that the online incorporation of a BV will soon be possible in addition to the existing route, which involves a personal appearance before a civil-law notary.

Implementation of the Directive on Cross-Border Conversions, Mergers and Divisions

This bill seeks to implement the European Directive on Cross-Border Conversions, Mergers and Divisions. It aims to make it easier for companies to carry out cross-border conversions, mergers and divisions, while safeguarding the rights of shareholders, creditors and employees.

The deadline for enacting this directive in Dutch law is 31 January 2023. The implementation date is not yet known.

Modernisation of Corporate Law

The Ministry of Justice and Security published a letter on 27 June 2022 regarding the progress of the modernisation of corporate law. Some noteworthy points in that letter:

  • The Minister wishes to take steps to modernise the law governing public limited liability companies with the help of an expert group consisting of legal practitioners and academics. This expert group will also be commissioned to look into, among other things, the limiting (again) of financial incentives for directors in acquisitions and the possible need for a regulation on loyalty shares.
  • Following on from the Temporary COVID-19 Act addressed above, the Minister wishes to make it easier for legal entities to hold digital meetings.

Please contact Sander Pieroelie (+31-6-222 878 65) for more information on this subject.

This article was published in the Newsletter Vestius of December 2022