3098 KLI ECLcover Vol5-nr5:v4 11-09-2008 15:12 Pagina 4

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on contributions for publication. Contributions may deal with European company law in a broad sense,

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C O L O P H O N

E D I T O R I A L B O A R D

STEEF BARTMAN (Main Editor), Professor of Company Law at Leiden University, the Netherlandse-mail: [email protected] CAHN Director of the Institute for Law and Finance, Johann Wolfgang Goethe-University, Frankfurt, Germanye-mail: [email protected] DORRESTEIJN Professor of International Company Law at Utrecht University, the Netherlandse-mail: [email protected] VAN DER ELST Professor of Law and Management, Tilburg University, The Netherlandse-mail: [email protected] FLEISCHER Professor of Law, Director of the Max Planck Institute for Comparative and International Private Law, Hamburg, Germanye-mail: [email protected] LAMANDINI Full Professor of Company Law at the University of Bologna, Italye-mail: [email protected] MARCOS IE Law School, Madrid, Spaine-mail: [email protected] MENJUCQ Professor of Company Law at the Univer-sity of Panthéon-Sorbonne, Paris, Francee-mail: [email protected] SCHWARZ Professor of Company Law at Maastricht Uni-versity, the Netherlandse-mail: [email protected] STROINSKI Warsaw University, Polande-mail: [email protected] TOMASIC Chair in Company Law, Durham Law School, Durham University, United Kingdome-mail: [email protected] WERLAUFF Professor of Company and Business Law at Aalborg University, Denmarke-mail: [email protected] WINTER Professor of International Company Law at the Universiteit van Amsterdam, the Netherlandse-mail: [email protected]

C O N T R I B U T I N G I N T E R N A T I O N A L L A W F I R M S

ALLEN & OVERY Jan Louis Burggraafe-mail: [email protected] & MCKENZIE Jeroen Hoekstrae-mail: [email protected] BRAUW Geert Potjewijde-mail: [email protected] PIPER Marnix Holtzere-mail: [email protected]

HOUTHOFF BURUMA André G. de Neve e-mail: [email protected] & LOEFF / UTRECHT UNIVERSITY Tineke Lambooye-mail: [email protected] STIBBE Christian van Megchelene-mail: [email protected]

C O U N T R Y R E P O R T E R S

MANUEL BARROCAS Barrocas Sarmento Neves,Sociedade de Advogados R.L., Portugale-mail: [email protected]ÇOIS CARLE & ISABELLE DESJARDINS e-mail: [email protected], [email protected] N. CATANA General Chancellor of Babes-Bolyai University, Cluj-Napoca, Romaniae-mail: [email protected] DOTEVALL School of Business, Economics and Law, Göteborg University, Swedene-mail: [email protected] VAN DER ELST Professor of Law and Management, Tilburg University, The Netherlandse-mail: [email protected] HAVEL Institute of Law, Czech Academy of Science, Prague, Czech Republice-mail: [email protected] LAMANDINI University of Bologna, Italye-mail: [email protected] LENNARTS, Utrecht University, the Netherlandse-mail: [email protected] MARCOS Instituto de Empresa Business School, Madrid, Spaine-mail: [email protected] MASOUROS Attorney at Law in Athens Greece,and PhD-fellow in Corporate Law at Leiden University,The Netherlandse-mail: [email protected] VAN MEERTEN-HEMELA e-mail: [email protected] SJÅFJELL Centre for European Law, Faculty of Law, University of Osloe-mail: [email protected] STROINSKI Warsaw University, Polande-mail: [email protected] TEICHMANN University of Heidelberg, Germanye-mail: [email protected] WERLAUFF Aalborg University, Denmarke-mail: [email protected]

E D I T O R I A L S E C R E T A R Y

CORNELIS DE GROOT Leiden University, the Netherlandse-mail: [email protected]

Published by:Kluwer Law InternationalPO Box 3162400 AH Alphen aan den RijnThe NetherlandsWebsite: www.kluwerlaw.com

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European Company Law (ECL) is published under the aegis of the Centre for European Company Law (CECL), an academic partnership of the Universities of Leiden, Utrecht and Maastricht, the Netherlands (www.cecl.nl). �e purpose of CECL is to further the study of c ompany law by

,slevel lanoitanretni rehto no dna UE eht ni stnempoleved htob edulcni esehT .seussi lanoitanarpus no gnisucofas well as comparative law. Leiden University acts as the leading partner in CECL, with Professor Dr. Steef M. Bartman, as coordinating director. ECL aims to be interesting for both practising and academic lawyers in the �eld of European company law. �ere are six issues of ECL per year. Two of these (April and October) concentrate on speci�c topics. �e other issues (February, June, August and December) contain art icles on various subjects and also include country reports of a general nature, highlighting important developments in a number of EU jurisdictions, as well as columns that o�er summaries of recent EU legislation, ECJ case law oirep lagel lanoitan suoirav morf selcitra detceles fo dna dicals.

European Company Law

EUROPEAN COMPANY LAW DECEMBER 2012, VOLUME 9, ISSUE 6282

Table of Contents285

286

300

305

311

Editorial

SPE and EMCA: Will the Twain Meet?

Adriaan F.M. Dorresteijn

Is the Comply or Explain Principle a Suitable Mechanism for Corporate Governance

throughout the EU?: The Dutch Experience

In April 2011, the European Commission launched its Green paper on the EU corporate

governance framework. The purpose of this Green paper is to foster the debate

regarding a diverse range of corporate governance issues. One of the issues raised by the

Commission regards the functioning and the effectiveness of the so-called comply or

explain-principle. Experience with this principle in the Dutch context shows that in a

large majority of the cases in which a provision in a corporate

governance code has not been applied, the reasons have been formulated in general

terms, a disclaimer has been incorporated, or no reasons whatsoever have been provided.

Rients Abma & Mieke Olaerts

Un-consented Transfers of Shares: A Comparative Perspective

Both the Portuguese Commercial Companies’ Code and the Italian Civil Code make

the transfers of shares in a Portuguese sociedade por quotas and in an Italian società a

responsabilità limitata freely transferable. Both provisions are default rules. An analysis

of articles of association suggests that shareholders often introduce restrictions on

transfers of shares. However, a sample of disputes over un-consented transfers in

Portuguese and Italian courts shows that shareholders often do not abide by these

rules they themselves have created and that they frequently ignore the default rules

they have not opted out from.

Lécia Vicente

Trading the Straightjacket for a Leotard: Introducing the New Dutch B.V. Law

The Netherlands enacted new legislation on 12 June 2012 concerning the private limited

liability company, termed the B.V. (besloten vennootschap met beperkte aansprakelijkheid).

This law strives to change the current straightjacket of B.V. law into a legal leotard. This

has caused the new law to be referred to as the Flex(ible) B.V. law and the corporate

entity of the B.V. to be referred to as the Flex B.V. The new law entered into force

on 1 October 2012. Notable changes that the Flex B.V. law has brought are in the fields

of capital, shares, the board of managing directors, and minority shareholders

Nicole L. Vreeman

Venture Capital Funds: Regulation and Evolution

The proposed Regulation on European Venture Capital Funds aims not only to stimulate

the rapid and smooth process of raising and structuring funds as an essential element

to start and restart venture capital cycles, but also to develop a sustainable and robust

venture capital industry. However, the rules on obtaining an EU-passport still make

structuring venture capital funds quite an ordeal.

Erik P.M. Vermeulen & Diogo Pereira Dias Nunes

283EUROPEAN COMPANY LAW DECEMBER 2012, VOLUME 9, ISSUE 6

319

325

327

330

333

Vale: Increasing Corporate Mobility from Outbound to Inbound Cross-Border

Conversion?

On 12 July 2012, the Court of Justice of the European Union rendered a judgment

in the Vale case. With this judgment, an important further step has been taken with

respect to cross-border restructurings within the EU, especially with respect to cross-

border conversions. In 2008, the EU Court rendered a judgment in the Cartesio case

in which it considered that the cross-border transfer of the seat of a company within

the Member States falls within the scope of the freedom of establishment ‘to the

extent that it is permitted under that law – the law of the Host Member State – to

do so’. In Vale, the EU Court has given a clear answer to the meaning of those latter

words.

Gerco C. Van Eck & Erwin R. Roelofs

Columns

Survey of Legislation and Case Law, May and June 2012

Paul Jager

Legal Periodicals: A Selection (July and August 2012)

Tom Dijkhuizen & Stephan Rammeloo

Book Review

Index

Article Index

284DECEMBER 2012, VOLUME 9, ISSUE 6 EUROPEAN COMPANY LAW

Trading the Straightjacket for aLeotard: Introducing the NewDutch B.V. LawNICOLE L . VREEMAN, ATTORNEY-AT-LAW AT DLA PIPER NEDERLAND N.V . IN AMSTERDAM, THE NETHERLANDS*

1. INTRODUCTION

The Netherlands enacted new legislation on 12 June 2012

concerning the private limited liability company, termed the B.V.

(besloten vennootschap met beperkte aansprakelijkheid). This law

strives to change the current straightjacket of B.V. law in to a legal

leotard. This has caused the new law to be referred to as the

Flex(ible) B.V. law1 and the corporate entity of the B.V. to be

referred to as the Flex B.V. Please note that there is only one type

of B.V! The Flex B.V. law replaces the old B.V. legislation and the

term Flex B.V. has been introduced in the legislative proposal and

the literature to refer to the spirit that caused the new legislation

to be enacted. Therefore, in this article, reference shall be made to

the B.V. only. After quite a legal journey the law entered into force

on 1 October 2012. The legislative proposal was first submitted on

31 May 2007 and was passed unanimously by Parliament on 15

December 2009. The Senate dealt with it as a formality and passed

the legislative proposal on 12 June 2012.2

This article strives to bring the reader’s attention to the most

notable changes brought about by the Flex B.V. law. It is, therefore,

not an attempt at an exhaustive discussion of all changes that the

Flex B.V. law entails. The article is organized in sections, each

treating a topic that reflects changes. First, changes in the law

concerning capital shall be addressed, followed by changes in the

law that effect shares in a B.V. These subjects will be addressed in

subsections 1 and 2 respectively. The changes highlighted in

subsection 3 relate to the rules concerning the Board of Managing

Directors. The most salient changes in the law that concern the

Board of Managing Directors as a whole and individual managing

directors will be addressed in subsection 4. Subsection V deals with

the transition from old B.V. law to the current Flex B.V. law.

Finally, the conclusion will recap the changes the Flex B.V. law

entails as well as indicate what practical steps may be taken by

companies in response to the Flex B.V. law.

2. CAPITAL

The rules concerning the obligation to have a minimum capital in

order to form a B.V. have been altered. It is no longer necessary to

deposit an amount of Euros (EUR) 18,000 to establish a B.V.3

Moreover, it is no longer obligatory to specify an amount of

authorized capital in the articles of association nor to insure that

at least one-fifth of that authorized capital is subscribed capital.

The deed of incorporation must still mention the capital of the

B.V., but this may be as small as the nominal value of one share, as

long as the contribution has a positive value.4 The B.V.’s equity

does not have to equate to a positive value at the time of

incorporation, because a negative value may exist due to

obligations that have been entered into on behalf of the B.V.,

which the B.V. may then ratify in the deed of incorporation.5 The

articles of association of a B.V. may deviate from these new rules

and may still indicate an amount of authorized capital.6 If this is

done, no more shares may be issued than the amount of

authorized capital without amending the amount of authorized

capital in the articles of association.7

Under the current Flex B.V. law, the shares in a B.V. can have a

very small nominal value, including only a fraction of a Euro cent.8

There is also a possibility to express the nominal value of the

shares and any other amount set out in the articles of association,

* E-mail: [email protected].

1 The official name is: Wet vereenvoudiging en flexibilisering B.V.-recht.

2 Please refer to the website of the Dutch Senate for a synopsis of the law on Governance and Supervision, which is referred to as EK.31.058,A. http://www.eerstekamer.nl/

wetsvoorstel/31058_wet_vereenvoudiging_en. (accessed Sept. 10, 2012).

3 Article 2:178 Dutch Civil Code as in effect at the time of publication (hereinafter ‘DCC’).

4 Parliamentary Minutes (Kamerstukken) 2006–2007, 31 058, no. 3, 28.

5 Ibid., 27.

6 Article 2:178 sub 1 DCC.

7 Mr P.H.N. Quist, De Flex -BV in vogelvlucht (I), WPNR 2012 (6938) July 14, 2012, 533–536.

8 Parliamentary Minutes (Kamerstukken) 2006–2007, 31 058, no 3, 39.

ARTICLE

Vreeman, Nicole L.‘Trading the Straightjacket for a Leotard: Introducing the New Dutch B.V. Law’. European Company Law 9, no. 6 (2012): 305–310.© 2012 Kluwer Law International BV, The Netherlands

in a currency other than the Euro. This possibility, however, is

limited to one foreign currency; it is thus not possible to apply

more than one currency.9 Such expression of value must be

included in the articles of association of the B.V.

The nominal value of a share is to be deposited at the time of

acquiring it.10 When the contribution to shares is made in kind at

the time of incorporation of a B.V., an auditor’s report as to the

value of the contribution is no longer required.11 It is thus in the

sole discretion of the founders to apportion a specific value to the

contribution.12 The founders are required to make a description of

the contribution indicating the value and the method of valuation.

The date of the description may not be older than six months

prior to the incorporation of the B.V.13 Moreover, under the Flex

B.V. law, a bank statement is no longer required when shares are

paid up in cash. This former requirement has been deleted in the

new law.14

Shares may be paid up in a currency other than the Euro if the

articles of association provides for this option in line with the

above.15 If shares are paid up in a currency other than the one in

which the nominal value of the shares is specified in the articles of

association, an exchange rate report is required. The exchange rate

on the day of the contribution to the shares is determinative for

the amount to be contributed.16

2.1 Capital Protection

The procedures for the reduction of capital in a B.V. have been

simplified. The Flex B.V. law abolishes the rules on creditor

objection,17 and creates a role for the Board of Managing Directors

in the procedure of reduction of capital of a B.V. Pursuant to the

new provisions of the Flex B.V. law, there is no longer the

possibility for a creditor to object in the event of reduction of

capital (either via the reduction of the nominal value of shares or

the redemption of shares). Such a reduction of capital no longer

has to be made public by being filed with the Chamber of

Commerce.18

In the event of redemption of shares, the Board of Managing

Directors must make a specific decision.19 There is a two-prong

test which consists of the following: (i) an equity test and (ii) a

liquidity test.20 The Board of Managing Directors is required to

apply: redemption of shares is prohibited in the event that (i) the

B.V.’s equity, minus the price to be paid for the redemption of the

shares, is less than the reserves that the B.V. is required to hold by

law or by its articles of association, or (ii) that the Board of

Managing Directors knows or should reasonably be expected to

foresee that the B.V. will not be able to continue payment of its

due and outstanding debts.21 A misjudgement in application of the

second prong has consequences for the Board of Managing

Directors. The managing directors are jointly and severally liable

for the deficit that has occurred by redemption of the shares.22 The

second prong of the test is also applicable to the payment of

dividend and will be discussed in paragraph 3.5 in more detail.

3. SHARES

3.1 General

Every share has the right to be represented in the general

meeting.23 The articles of association may determine that the

general meeting of shareholders may be held outside the

Netherlands.24

3.2 Shares with and without (Voting) Rights

The Flex B.V. creates the possibility of having shares with voting

rights and shares without voting rights25 as well as shares entitled

to profit distributions and shares without entitlement to profit

distributions,26 thus aligning the Dutch B.V. with other European

private limited liability corporate entities. In the event that shares

without voting rights are created, this must be specified explicitly

in the articles of association of the B.V. As mentioned above, it is

also possible to have shares that are not entitled to profit

distributions. Again, such shares must be explicitly created in the

9 Article 2:178 sub 2 DCC and Parliamentary Minutes (Kamerstukken) 2006–2007, 31 058, no. 3, 40.

10 Article 2:191 sub 1 DCC. This provision also includes an exception to that general rule.

11 Article 2:204b sub 1 DCC.

12 Article 2:204a sub 1 DCC.

13 Ibid.

14 Article 2:203a (old law) DCC.

15 Article 2:191a sub 2 DCC and Parliamentary Minutes (Kamerstukken) 2006–2007, 31 058, no. 3, 43.


17 Article 2:209 (old law) DCC.

18 Parliamentary Minutes (Kamerstukken) 2006–2007, 31 058, no. 3, 68 and 69.



21 Ibid.

22 Article 2:207 sub 3 DCC. For the liability of the selling shareholder, please refer to the paragraph on shareholders.


24 Article 2:226 lid 1 DCC.

25 Article 2:228 sub 1 and 5 DCC.



articles of association of the B.V.27 Please note that it is not

possible to create shares that lack both voting rights and the right

to profit distributions at the same time.28 These various rights

cannot only be allocated to classes of shares, but may also be

allocated to a specific category of shares.29 A category may consist

of holders of certain numbered shares (e.g., shares numbered 1-

100). All shares belonging to a specific category must have the

same rights,30 but specific rights may be allocated to each category.

Please note that at least one share with voting rights must be held

by someone other than the B.V. itself.31

The specific category of shares cannot only be used to indicate

what rights those specific shareholders have to vote and to

distribution of profits, but can also be used to allocate other

rights.32 Such rights are set out in the articles of association. A

specific category of shares may be granted the right, for example,

to appoint a certain managing director33 (in deviation of the

general rule that the general meeting of shareholders as a whole

appoints all managing directors). In this manner, each category of

shares can be represented by its ‘own’ managing director. Please

note that, this possibility cannot be used as a mechanism to attain

exclusion of certain shareholders: every shareholder must be able

to vote on the appointment of at least one managing director.34

3.3 Transfer of Shares

The Flex B.V. law abolishes the mandatory provision on transfer

restrictions in the old law, which had to be included in the articles

of association.35 Now, the articles of association may determine

that no transfer restrictions are applicable or that other transfer

restrictions, such as a right of approval, are applicable. If the

articles of association are silent on the subject, then the Flex B.V.

law makes a right of first refusal36 for the other shareholders

applicable.37 Moreover, it is possible for the articles of association

to determine that a lock-up shall be applicable, thus preventing

shares from being sold (transferred) for a specific period of time

set out in the articles of association.38

Besides the possibility to include (or not include) transfer

restrictions, the articles of association can determine that the

holder of all shares or a certain class of shares is obliged to offer

and transfer all or part of those shares in specific situations which

are to be described in the articles of association, such as when a

shareholder/director ceased to hold the position of director.39 The

price the selling shareholder is to receive for its shares must be

equal to a price determined by an independent expert, unless a

different price is provided for in the articles of association. The

latter price cannot, however, be imposed on a shareholder against

his will.40 An expert determination of the value of the shares is

also required for the situation in which the B.V. indicates an

interested party to a shareholder wishing to sell its shares.41

3.4 Qualitative Requirements for Shareholders

The articles of association may impose qualitative requirements

with respect to a shareholder.42 These qualitative requirements may

also be specific to certain categories of shares.43 This is relevant at

the time of incorporation for the founders/first shareholders, but

this also becomes relevant at the time when a shareholder wishes

to sell its shares, because the entity or person to which a

shareholder may sell its shares needs to fulfil those qualitative

requirements as well.44 In the event that the selling shareholder

cannot, or reasonably cannot, transfer its shares due to those

qualitative requirements, the shareholder can request the B.V. to

indicate interested parties to whom the selling shareholder may

transfer all of its shares pursuant to an arrangement that must be

set out in the articles of association.45 This arrangement must yield

a price per share that is equal to the value of the shares as

determined by an independent expert.46


28 Article 2:228 sub 5 DCC. Please note that this Article states that shares that do not have voting rights, cannot be deemed to not have profit distribution rights. The legislator

has only written this down in a one-way form. The question arises whether, if the law is read strictly, it would be possible to have shares that do not have profit distribution

rights and then strip those shares from their voting rights (thus turning the sequence of the law around). It seems clear, however, that the legislator did not intend for this to

be an option.

29 In Dutch: Aanduiding van aandelen.

30 Article 2:228 sub 5 DCC and Parliamentary Minutes (Kamerstukken) 2006–2007, 31 058, nr. 3, 86.

31 Article 2:175 DCC and Parliamentary Minutes (Kamerstukken) 2006–2007, 31 058, no. 3, 38 and 39.

32 Article 2:189a DCC.



35 In Dutch: Blokkeringsregeling.

36 In Dutch: Aanbiedingsregeling.


38 2:195 sub 3 DCC.

39 Article 2:192 sub 1c DCC.



42 Article 2:192 sub 1b DCC.






If the selling shareholder sells its shares to the B.V. itself, the

selling shareholder has to determine whether or not the B.V. is in a

financial position to buy those shares. The shareholder who sells

his shares to the B.V., and who objectively should have known that

such purchase by the B.V. would lead to a situation in which the

B.V. could no longer pay its due and outstanding debts, is liable for

the amount that he received for those shares.47

3.5 Distributions to Shareholders

The rules on distribution to shareholders have significantly

changed under the Flex B.V. law; most notably in the sense that the

Flex B.V. law provides for a test that needs to be applied. The B.V.

may distribute profit to its shareholders, and other persons entitled

to the profits intended for distribution, only to the extent that the

B.V.’s equity exceeds the subscribed capital plus the reserves that

must be maintained by law or pursuant to the articles of

association. The general meeting of shareholders is entitled to

decide on the distribution of profit, unless another body of the

B.V. has been granted such right pursuant to the articles of

association.48 Regardless of the body that decides on the

distribution of profit, such decision does not have any (legal)

consequences as long as the Board of Managing Directors of the

B.V. has not ratified the decision.49

The Board of Managing Directors is required to refuse to

distribute profits applying the second prong, the liquidity test, as

referred to in paragraph 2.1. in the event that the Board or

Managing Directors knows or should reasonably be expected to

foresee that the B.V. will not be able to continue payment of its

due and outstanding debts.50 If the Board of Managing Directors

ratifies a decision to distribute profits that should have been

denied, the managing directors are jointly and severally liable for

the deficit that exists as a consequence of such distribution.51

Receiving a profit distribution is not without any risk: if the

recipient knew or should have reasonably foreseen that the B.V.

would not be able to meet payments to its creditors, the recipient

is liable to repay the deficit that was caused by such distribution of

profits, with a maximum of the distribution it received.52 This is

without prejudice to the liability that may be applied under the

conditions that the Court applied in the Nimox case.53

3.6 Minority Shareholders

It could be argued that the Flex B.V. law less comprehensively sets

out the rights of shareholders, leaving these to be decided upon by

each B.V., such as in relation to the transfer of shares. The position

of the minority shareholder thus deserves some attention. In

general, shareholders in an identical position must be treated in an

identical manner.54 Moreover, unless otherwise provided for in the

articles of association, all shares have equal rights in proportion to

their amount of the share capital.55

There are numerous provisions in the Flex B.V. law that provide

protection to the minority shareholder. Five categories have been

identified in the literature: (i) the requirement of assent of

shareholders, (ii) the requirement of unanimity, (iii) the

requirement of a resolution of approval, (iv) the exemption to be

bound, and (v) the right to exit.56

Pursuant to the first category and as indicated earlier, the Flex

B.V. creates the option that the articles of association may

determine that a lock-up shall be applicable, thus preventing shares

from being sold for a specific period of time set out in the articles

of association. Such determination much be agreed upon by all

shareholders to which the lock-up applies.57 The latter is also

applicable in the case that the B.V. wishes to redeem shares or to

lower the nominal value of shares.58

The second category is encountered, inter alia, in the provision

concerning voting rights. The articles of association may deviate

from the general rule that each share has the right to vote, as set

out above. However, such deviation in the articles of association

requires an amendment to the existing articles of association,

which can only be taken by a unanimous vote in a shareholders’

meeting where the entire subscribed capital is represented.59

The requirement of a resolution of approval is applicable in the

situation in which a resolution to amend the articles of association

would negatively effect the rights of shareholders of a certain

group or category. In that case, an approving resolution is required

of the affected group of shareholders.60

A shareholder is not bound by a decision that imposes

contractual obligations, makes specific requirements applicable to

47 For the liability of the board of directors and the directors individually, please refer to subsection 4.



50 Ibid.



53 Supreme Court of the Netherlands (Hoge Raad) Nov. 8, 2001 (174), in which the sole shareholder was held liable towards the creditors of a company, because the resolution

that was passed deciding to pay dividend, left the company in a position in which it could no longer pay its creditors.



56 Mr P.H.N. Quist, in his article De Flex -BV in vogelvlucht (II, slot), WPNR 2012 (6939) July 28, 2012, 553–557, identifies and sets out these five categories.

57 Article2:195 sub 3 DCC.





shareholders or imposes mandatory transfer in certain situations to

that shareholder.61

Finally, a shareholder whose interests have been harmed by the

other shareholders in such manner or degree that he can no longer

reasonably be held to be a shareholder, has a right to petition a

Court to request an exit from the B.V. meaning that his shares

must be taken over by the other shareholders.62

3.7 Tax Implications

Income (capital gains or dividends) that is derived from a

substantial interest in a B.V. is taxed with 25% Dutch personal

income tax at the level of the private individual. For Dutch income

tax purposes, a person has a substantial interest in the event that

one (together with one’s fiscal partner) holds an interest of at least

5% of the shares or of a class of shares in a company that is a

resident of the Netherlands. In this context, class of shares is

interpreted broadly to also include category of shares. If multiple

(smaller) categories of shares are created, the threshold of 5% will

more easily be attained, thus more easily leading to a substantial

interest.63 This is also applicable to shares without voting rights.

4. BOARD OF MANAGING DIRECTORS

4.1 General

Earlier in this article it has been noted that a specific group or

category of shares may appoint its ‘own’ managing director to the

Board of Managing Directors, as long as this does not lead to the

exclusion of a certain group or a certain category of shares. Also,

as noted earlier, this possibility cannot be used as a mechanism to

exclude certain shareholders, because every shareholder must be

able to vote on the appointment of at least one managing

director.64

4.2 Instructions to the Board of Managing Directors

The introduction of the Flex B.V. law refines the law concerning

the possibility that another body of the B.V. can give instructions

to the Board of Managing Directors. The articles of association

may provide that the Board of Managing Directors is to act

according to the instructions given to it by another body of the

B.V.65 These instructions may concern guidelines as to specifically

identified fields of interest.66 The Board of Managing Directors

must follow such instructions, unless the instructions are contrary

to the interests of the B.V. as a whole and its business. The Board

of Managing Directors, thus, has its own responsibility to carefully

review the instructions it receives. In its review, the Board of

Managing Directors is guided by the interests of the B.V. itself as a

whole and its business.67

5. RULES OF TRANSITION TO THE FLEX B.V. LAW

The provisions of the Flex B.V. came into effect on 1 October

2012.68 Under the old law, it was normal practice to refer to

provisions of Dutch corporate law in the articles of association of

a B.V. by including reference to the legal provisions in the articles

of association. As a result, the situation arises in which articles of

association still refer to the old law. If this is the case, then the

references made (to the old law) will be deemed to be references to

the new Flex B.V. law, unless doing so would be contrary to a spirit

of the specific provision in the articles of association.69 An

example may be the reference to Article 2:216 sub 4 DCC. This

provision still exists in the new Flex B.V. law, however it says

something very different from what it used to say in the old law.70

Thus, assuming that a reference to that provision is a reference to

that provision in the new Flex B.V. law, would be contrary to what

was envisioned at the time of inclusion of the provision in the

articles of association.

An interesting note can be made concerning provisions in

articles of association that were previously voidable because they

were inconsistent with provisions of the former B.V. law. Such

provisions, if they are now consistent with the provisions in the

new Flex B.V. law, are no longer voidable, but rather valid and

enforceable.71 There has been debate in the literature concerning

the cases in which the Flex B.V. law provides a general rule that the

articles of association may further specify (such as including an

amount of authorized capital in the articles of association). Some

argue that a provision that is introduced by the Flex B.V. law but

contrary to a provision included in the articles of association, shall

remain null,72 while other take the contrary standpoint. This is

thus a question that will need to be addressed in the future.

At the moment that the articles of association are amended (for

whatever reason), they must reflect two items that the Flex B.V. law

provides for. The first concerns the rights of holders of depository



63 Mr G.J.W. Kinnegim, De flex-bv opnieuw fiscaal getoets, Weekblad Fiscaal Recht, WFR 2011/116, updated Jan. 1, 2011.





68 Article 68a of the Transitory Law.

69 Article 71 of the Transitory Law.

70 At present, it states who may be equated with a managing board member. In the old law, the provision dealt with the possibility of interim distributions.

71 Article 81 sub 1 of the Transitory Law.

72 Mr P.H.N. Quist, De Flex -BV in vogelvlucht (II, slot), WPNR 2012 (6939) July 28, 2012, 553–557.


receipts. The shareholders’ register must reflect whether holders of

certificates have the right to attend the general meeting of

shareholders. At the first amendment of the articles of association

such right to attend the general meeting of shareholders must be

added.73 The second item concerns B.V.’s that have a Supervisory

Board. Such B.V. must add the rules on absence or inability to

serve of the supervisory board members to the articles of

association.74

6. CONCLUSION

6.1 General

The above discussion is a general review of notable changes that

the Flex B.V. law has brought in the fields of capital, shares, the

Board of Managing Directors and minority shareholders. The Flex

B.V. law has brought an interesting alteration to the corporate

entity of the B.V., making it more simple and more flexible. It has

stripped the old B.V. law of the constraints it imposed on the

incorporator-to-be, most notably in the field of capital. The bar

has been lowered substantially, and monetary issues will no longer

provide any obstacle to the spirit of the entrepreneur who wishes

to incorporate a B.V.

Yet, at the same time, existing B.V.’s have gained the

opportunity to move their unique characteristics, ordinarily set out

in the shareholders’ agreement, and include those unique

characteristics in the articles of association. This is most visible in

the possibility to create categories of shares and to designate

certain specific rights to specific categories of shares.

6.2 To Amend or Not to Amend

As set out above in the subsection concerning the transition from

old to new law, no existing Dutch company is obligated to directly

change the articles of association of the B.V. At the moment that

the articles of association are amended (for whatever reason), they

must make two changes that the Flex B.V. law provides for as

noted in the paragraph concerning the rules of transition to the

Flex B.V. law.

In order to benefit from the more flexible law, however, the

articles of association will, in practice, have to be amended. This is

the case, because currently most articles of association that are

based on the old law contain provisions that are a copy of

provisions of the old law. Because the new law permits the articles

of association to deviate from provisions in the Flex B.V. law at

certain points, and thus to set more stringent rules in many

respects, it is the articles of association that will be leading in the

determination of what rules apply.

If one wishes to break free from the straightjacket and

experience the freedom of movement that a leotard facilitates,

provisions that constrain such freedom of movement will have to

be deleted from the articles of association.

73 Implementation Act (Invoeringswet) Art. V.2 sub 1.

74 Implementation Act (Invoeringswet) Art. V.2 sub 7.


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C O L O P H O N

E D I T O R I A L B O A R D

STEEF BARTMAN (Main Editor), Professor of Company Law at Leiden University, the Netherlandse-mail: [email protected] CAHN Director of the Institute for Law and Finance, Johann Wolfgang Goethe-University, Frankfurt, Germanye-mail: [email protected] DORRESTEIJN Professor of International Company Law at Utrecht University, the Netherlandse-mail: [email protected] VAN DER ELST Professor of Law and Management, Tilburg University, The Netherlandse-mail: [email protected] FLEISCHER Professor of Law, Director of the Max Planck Institute for Comparative and International Private Law, Hamburg, Germanye-mail: [email protected] LAMANDINI Full Professor of Company Law at the University of Bologna, Italye-mail: [email protected] MARCOS IE Law School, Madrid, Spaine-mail: [email protected] MENJUCQ Professor of Company Law at the Univer-sity of Panthéon-Sorbonne, Paris, Francee-mail: [email protected] SCHWARZ Professor of Company Law at Maastricht Uni-versity, the Netherlandse-mail: [email protected] STROINSKI Warsaw University, Polande-mail: [email protected] TOMASIC Chair in Company Law, Durham Law School, Durham University, United Kingdome-mail: [email protected] WERLAUFF Professor of Company and Business Law at Aalborg University, Denmarke-mail: [email protected] WINTER Professor of International Company Law at the Universiteit van Amsterdam, the Netherlandse-mail: [email protected]

C O N T R I B U T I N G I N T E R N A T I O N A L L A W F I R M S

ALLEN & OVERY Jan Louis Burggraafe-mail: [email protected] & MCKENZIE Jeroen Hoekstrae-mail: [email protected] BRAUW Geert Potjewijde-mail: [email protected] PIPER Marnix Holtzere-mail: [email protected]

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C O U N T R Y R E P O R T E R S

MANUEL BARROCAS Barrocas Sarmento Neves,Sociedade de Advogados R.L., Portugale-mail: [email protected]ÇOIS CARLE & ISABELLE DESJARDINS e-mail: [email protected], [email protected] N. CATANA General Chancellor of Babes-Bolyai University, Cluj-Napoca, Romaniae-mail: [email protected] DOTEVALL School of Business, Economics and Law, Göteborg University, Swedene-mail: [email protected] VAN DER ELST Professor of Law and Management, Tilburg University, The Netherlandse-mail: [email protected] HAVEL Institute of Law, Czech Academy of Science, Prague, Czech Republice-mail: [email protected] LAMANDINI University of Bologna, Italye-mail: [email protected] LENNARTS, Utrecht University, the Netherlandse-mail: [email protected] MARCOS Instituto de Empresa Business School, Madrid, Spaine-mail: [email protected] MASOUROS Attorney at Law in Athens Greece,and PhD-fellow in Corporate Law at Leiden University,The Netherlandse-mail: [email protected] VAN MEERTEN-HEMELA e-mail: [email protected] SJÅFJELL Centre for European Law, Faculty of Law, University of Osloe-mail: [email protected] STROINSKI Warsaw University, Polande-mail: [email protected] TEICHMANN University of Heidelberg, Germanye-mail: [email protected] WERLAUFF Aalborg University, Denmarke-mail: [email protected]

E D I T O R I A L S E C R E T A R Y

CORNELIS DE GROOT Leiden University, the Netherlandse-mail: [email protected]

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