Agenda

BILL ONLINE ESTABLISHMENT BV ADOPTED BY THE HOUSE OF REPRESENTATIVES

16/06/2023

The bill online establishment BV was adopted by the Dutch House of Representatives on 1 June 2023.

Directive 2017/1132/EU (hereinafter referred to as ‘the Directive’) regarding the use of digital tools and processes in the context of company law, stipulates in Article 13g(1) that an applicant must be able to set up a company covered online. The bill aims to make it possible to set up private limited companies (BVs) online, so without the applicants having to physically register with an authority, person or body. Appearing before the notary can be done via image connection instead of physically, unless there is a suspicion of identity fraud or doubt about the legal capacity of the founder.

The bill thus implements Directive (EU) 2019/1151 of the European Parliament and of the Council of 20 June 2019 amending Directive (EU) 2017/1132  and amends Book 2 of the Dutch Civil Code (hereinafter referred to as 'BW' or ‘DCC’ and the Law on Notaries (hereinafter referred to as 'Wna').

The proposed amendments to Book 2 of the DCC and the Wna will be discussed in more detail below.

  • Article 2:175 of DCC new: A new article 2:175a DCC has been inserted. This makes it possible for a BV to be incorporated electronically and for this to be possible using a model deed of incorporation (the proposed Article 2:175a paragraphs 1 and 2 DCC). In the proposed Art. 2:175a paragraphs 3 and 4 DCC, Article 13g, seventh paragraph, of the Directive is implemented. It provides that incorporation by natural persons using a model deed of incorporation must be possible within five business days and in other cases within ten business days, counting from the most recent of the following dates: the date on which all formal requirements for incorporation by electronic notarial deed are met or the date of payment of the share capital. If the incorporation is not exclusively carried out by natural persons or if no model deed of incorporation is used, the incorporation online will take ten working days. If the incorporation cannot be completed within these terms, the notary informs according to the proposed art. 2:175a paragraph 4 DCC the founders of the reasons for the delay.  

Finally, the proposed Article 2:175a paragraphs 5 and 6 of the Dutch Civil Code contains an extra guarantee against fraud in the online formation of BVs. It introduces the obligation that the intended director or supervisory director of the BV to be incorporated online declares whether he or she has been banned from directorship in another Member State, related to one or more of the grounds referred to in Section 106a of the Bankruptcy Act.

  • Article 2:176 DCC: Two article paragraphs are added to the existing Article 2:176 of the DCC. The first sentence of Article 2:176 of the DCC stipulates that the deed of incorporation of the company must be executed in the Dutch language. Paragraph 2 regulates the option to execute the deed of incorporation, in case of online incorporation of a BV, in English instead of in Dutch according to the second sentence of Article 13h(3) of the Directive. It remains possible to execute the online deed of incorporation in Dutch. Article 2:176 of the DCC also stipulates that a power of attorney to cooperate with the deed of incorporation must be granted in writing. Article 2:176, paragraph 3 of the DCC stipulates that the requirement that a proxy must be granted in writing is met if it is granted electronically as referred to in Article 53f Wna.
  • Section 2:191a paragraph 4 of DCC: This implements the option in Article 13g(4)(d) of the Directive. Contrary to art. 2:191a paragraph 1 of the Dutch Civil Code, payment on the shares upon incorporation of a BV that is incorporated electronically can only be made in cash.
  • Article 53a, Article III Wna: This article contains a number of definitions necessary for the bill. In the definition of Article 53a, a link has been sought with Article 8, second paragraph, part c of the Directive. Article 9 of the Act General Rules on Electronic Traffic in the Public Domain and on the Generic Digital Infrastructure (Digital Government Act) (34 972) contains the rules regarding the approval of a system of electronic identification.
  • Article 53b Wna: This article regulates the scope of application of the proposed «Title Va. The electronic notarial deed». «Title Va. The electronic notarial deed» applies to the notarial deed as referred to in article 175, paragraph 2 of the DCC, if application is made to the proposed first paragraph of article 175a, by which a private company with limited liability is established electronically.
  • Article 53c Wna: Article 53c implements Article 13h of Directive 2017/1132/EU, which obliges Member States to make available a model deed of incorporation.
  • Article 53d Wna: This article ensures that the civil-law notary connects to a data processing system managed by the KNB that enables the electronic execution of an electronic notarial deed.
  • Article 53e Wna: A notarial deed is concluded by the signing of the deed by the parties, the civil-law notary and any witnesses (in the case of a party deed), or by the civil-law notary and any witnesses (in the case of an official report) (see article Article 37, paragraph 2 of the Wna). The electronic signatures included in Article 3(10) and (11) of the EIDAS Regulation have the same legal effect as a handwritten signature (Article 3(12) of the EIDAS Regulation), if for these two electronic signatures the method of signature used is sufficiently reliable, in view of the purpose for which the electronic signature is used and all other circumstances of the case.
  • Article 53f Wna: This article stipulates that a power of attorney to cooperate with an electronic notarial deed can only be granted by means of the data processing system in the presence of the civil-law notary or his deputy who executes the electronic notarial deed. The power of attorney can only be granted to a person working under his responsibility.
  • Article 53g Wna: Paragraph 1 stipulates that the civil-law notary establishes the identity of the parties appearing before him on the basis of an electronic means of identification via the data processing system. Pursuant to the second sentence, parties and witnesses may appear before the civil-law notary by using the direct image and sound connection through the data processing system. It is also possible that parties and witnesses physically appear before the civil-law notary. Paragraphs 2 and 3 of this Article contain exceptions to the application of paragraph 1. The exception rules apply if there is a suspicion that identity fraud has been committed with a view to verifying identity, or the rules on legal capacity and power of representation are not complied with, and this is justified for reasons of public interest, namely guaranteeing the rules on the legal capacity of the parties and their authority to represent a company as referred to in Article 13g, eighth paragraph, of Directive 2017/1131/EU .
  • Article 53h Wna: Paragraph 1 regulates that the place where the electronic notarial deed is executed is the place on the territory of the Netherlands where the civil-law notary for whom the electronic notarial deed is executed is located. Paragraph 2 stipulates that the time of signing of the deed by the notary takes place by using a qualified electronic time stamp as referred to in Article 3(34) of the EIDAS Regulation.
  • Article 53i Wna: This article contains the rules regarding electronic power of attorney.
  • Article 53j Wna: Paragraph 1 regulates the initialling, stating the reason for the absence before signing the notarial deed and the changes to the text of the notarial deed before signing of the notarial deed have been declared inapplicable to the electronic notarial deed due to the fact that is not necessary to execute an electronic notarial deed remotely from the civil-law notary and the electronic deed cannot be easily corrected during the execution process. Paragraph 2 of Article 53j states that the application of the hour and minute of that signature as referred to in Article 43, paragraph 4, fifth sentence, is the application of a qualified electronic time stamp. Paragraph 3 stipulates that the civil-law notary does not make a note on the original deed, but links a note to the original deed, stating the date and repertory number of this official report.
  • Article III (concurrence provision): At the time of the submission of the Bill on the Online Establishment of BV Act, the bill submitted by Royal Message of 19 June 2018 General Rules on Electronic Traffic in the Public Domain and on the Generic Digital Infrastructure (Digital Government Act) (34 972) was in treatment in the Senate. The Dutch Senate has passed the Digital Government Act on 21 March. The Digital Government Act (Wdo) will be introduced in phases on 1 July 2023. Pursuant to Article 9 of the Wdo, the Minister of the Interior and Kingdom Relations can designate or recognize means of identification for natural persons. Article III of the Bill for the Online Establishment of a BV Bill has been proposed to amend the definition of electronic identification in Article 53a of the accompanying proposal to that law from the moment that Article 9 of the proposal for a Digital Government Act is enacted and enters into force.

The proposal is now before the Senate for consideration. After approval by the Senate, the date of entry into force will be announced.

In case of questions, please do not hesitate to send us via info@nazali.com.

 

References:

https://www.eerstekamer.nl/wetsvoorstel/36085_online_oprichting_besloten

https://www.eerstekamer.nl/behandeling/20220421/voorstel_van_wet

https://www.tweedekamer.nl/kamerstukken/wetsvoorstellen/detail?cfg=wetsvoorsteldetails&qry=wetsvoorstel%3A36085

https://www.eerstekamer.nl/wetsvoorstel/34972_wet_digitale_overheid