The Dutch Emergency Act was introduced on 24 April 2020 because of the coronavirus (COVID-19) outbreak. The temporarily rules under the Emergency Act apply retroactively from 16 March 2020. Initially, it was expired in September 2020 however due to the ongoing consequences of COVID-19, the Emergency Act is extended to 1 April 2021.
This Emergency Act facilitates for temporarily rules deviating from the current requirements of Book 2 of the Dutch Civil Code (hereinafter referred to as “DCC”) for Dutch legal entities on the subjects among others as follows:
1. The form of decision-making and general meeting.
2. Extension of the period to prepare the annual accounts.
3. Limitation on the 'presumptions of proof' for directors' liability for the late filing of the annual accounts.
The temporary rules govern all forms of Dutch legal entities, however, this article only covers Private Limited Liability Company (Besloten Vennootschap/BV) and Public Company (Naamloos Vennootschap /NV), for the subjects as mentioned above.
The form of decision-making and general meeting
The facilitation of electronic decision-making by temporary derogation from the legal and statutory provisions concerning holding physical meetings of BV and NV (articles 2:116 and 2:226 DCC). The management board may decide to hold a virtual general meeting (instead of a physical general meeting) under certain conditions as follows.
The shareholders or the meeting members can follow and attend the general meeting via electronic means of communication if they have been given the opportunity to submit written or electronic questions about the items on the agenda no later than 72 hours before the general meeting, or 36 hours before the general meeting if the management board adopts such resolution within five days before the actual general meeting.
If the general meeting of an NV or BV has already been convened, the management board may change such a meeting to a virtual meeting no later than 48 hours before the start of the general meeting.
The questions of the shareholders or the members should be answered ultimately during the general meeting. These answers should also be made available to them on the website of the company or via an electronic means of communication. Furthermore, the management board must ensure that further questions may be submitted during the general meeting via electronic means of communication or otherwise unless this is not possible due to the circumstances. Any deviations from these requirements do not affect the validity of the resolutions adopted during the general meeting.
If the articles of association do not contain any provisions on electronic decision-making (articles 2:117 and 2:227 DCC), the management board may decide that votes can only be cast via electronic means of communication. In such a case, this must be specifically mentioned in the notice to convene the general meeting.
The provision in the articles of association that provides for physical management board and/or supervisory board meetings is suspended temporarily. If the articles of association provide for limitations of the authority of the management board or the approval of another corporate body or a third party relating to the rights granted to the management board in the Emergency Act, such provision does not apply (Emergency Act, paragraph 4, article 5 under ‘General’, point 4).
Extension of the period to prepare the annual accounts.
The management board may extend the period for preparing the annual accounts, whereas in the provision this extension should be done by the general meeting (article 2:101 DCC). The period for preparing the annual accounts of five months after the end of the financial year may be extended for a maximum of five months. In other words, the preparation of the annual accounts may be extended for a maximum of ten months after the end of the financial year. In case the management board uses the extension authority, the general meeting authority expires in this regard. Despite the extension for the preparation of the annual accounts, the annual accounts still need to be published with the Dutch Chamber of Commerce within 12 months after the end of the financial year.
Limitation on the 'presumptions of proof' for directors' liability for the late filing of the annual accounts.
In the event of bankruptcy, if the annual accounts of a company are not published within twelve months of the balance sheet date (article 2:394 DCC) relating to the most recent financial year, this will be regarded as manifestly improper management and is presumed to be a major cause of the bankruptcy. Under the Emergency Act, these presumptions of proof do not apply if the failure is caused by COVID-19, however, the obligation to maintain records and other related company administration (article 2:10 DCC) remains in place.
wetten.nl - Regeling - Tijdelijke wet COVID-19 Justitie en Veiligheid - BWBR0043413 (overheid.nl)
NAZALI TAX & LEGAL