The Dutch Minister of Legal Protection has submitted a bill titled “the Temporary Turbo Liquidation Transparency Act” (“Act”) (In Dutch; Tijdelijke wet transparactie turboliquidatie) to Parliament. This Act has been submitted due to concerns about possible abuse with regards to the liquidation of a company.
The Minister has suggested some improvements to the current Book 2 of the Civil Code (“BW2”), with regards to the current liquidation scheme of article 2:19 paragraph 1 sub a and paragraph 4 of the BW2. The reason for these improvements are due to the expected rise in the use of the liquidation scheme in the short term due to the expected economic consequences of the COVID-19 outbreak[1].
This bill aims to increase transparency, improve the legal protection of creditors and combat abuse more effectively. It is expected that this will make the regulation more accessible for companies and facilitate its use. The controlled liquidation of companies in this way can prevent debts from mounting up and bankruptcy becoming inevitable. The proposed scheme will ensure that, once the economic consequences of the COVID-19 pandemic have been contained, entrepreneurs will be able to continue their business and personal lives.
The way in which this Act will enact these improvements is by increasing the financial accountability of the board members. For example with regards to the obligation to deposit documents will be extended. This concerns documents in which the board provides financial accountability. If there are grounds to assume that the accountability obligation has not been met, creditors may, with the authorisation of the subdistrict court, inspect the records of the dissolved legal entity. In the event that debts remain, it will be possible to impose a civil ban on directors/ board members of companies who have failed to comply with the obligation to publish or that have (deliberately) abused the scheme of article 2:19 BW2, or have significantly harmed one or more creditors[2].
These bill has not yet been approved and is currently in the preparation phase.
[1] Tijdelijke wijziging van Boek 2 van het Burgerlijk Wetboek, de Faillissementswet en de Wet op de economische delicten in verband met het vergroten van transparantie bij de ontbinding van rechtspersonen zonder baten en de invoering in dat kader van de mogelijkheid van een civielrechtelijk bestuursverbod (Tijdelijke wet transparantie turboliquidatie) | Tweede Kamer der Staten-Generaal. (2022, 12 juli). Tweedekamer.nl. Geraadpleegd op 14 juli 2022, van https://www.tweedekamer.nl/kamerstukken/wetsvoorstellen/detail?cfg=wetsvoorsteldetails&qry=wetsvoorstel%3A36172
[2] Memorie van toelichting, Tijdelijke wijziging van Boek 2 van het Burgerlijk Wetboek, de Faillissementswet en de Wet op de economische delicten in verband met het vergroten van transparantie bij de ontbinding van rechtspersonen zonder baten en de invoering in dat kader van de mogelijkheid van een civielrechtelijk bestuursverbod (Tijdelijke wet transparantie turboliquidatie) | Tweede Kamer der Staten-Generaal. (2022, 07 juli). Tweedekamer.nl.
NAZALI TAX & LEGAL