Liquidating companies in the Netherlands per 15 November 2023
On 14 March 2023, a new law (Tijdelijke wet transparantie turboliquidatie) was adopted by the Dutch legislator. This law introduces a filing obligation of the managing board that will apply to shortened liquidation procedures applied as per 15 November 2023. Under this obligation, the managing board of the company must file certain (financial) documents with the Dutch trade register and inform creditors of the company of this filing. In the case of non-compliance with this filing obligation, creditors may have a right to inspect the administration of the company and managing directors may be sanctioned.
Shortened liquidation procedure
A Dutch company is dissolved (ontbinding) by a resolution of the general meeting to such effect. The articles of association of the company may require the prior approval of another corporate body of the company. The shortened liquidation procedure applies if, at the moment of its dissolution, the company has no assets. Then, as a result of the resolution to dissolve the company, the company ceases to exist at the moment of that resolution. This also applies if the company still has liabilities.
As a result of the shortened liquidation procedure, the rights of creditors may be frustrated. To provide creditors with more information and additional legal grounds, the legislator took action and adopted the Tijdelijke wet transparantie turboliquidatie. This law aims to increase transparency in shortened liquidation procedures, and better protect creditors.
As per this new law being effective from 15 November 2023, the managing directors of the company, within 14 days after the company’s dissolution by the general meeting, must file with the Dutch trade register:
- a balance sheet with respect to the financial year in which the company was dissolved and (if not already done) the preceding financial year;
- a report setting out:
the reasons why the company had no more assets at the time of its dissolution;
- if applicable, the way in which the assets of the company have been liquidated and how the proceeds have been distributed; and
- if applicable, the reasons why any creditor was not fully paid; and
- if the company was obliged by law to publish its annual accounts with the trade register, any annual accounts over previous financial years that have not yet been published.
The managing directors must, without delay, make a written notification of these filings to creditors of the company.
Preparing and collecting the abovementioned documents may take time. We therefore recommend to only adopt the resolution to dissolve a company once these documents are (near) final in order to arrange for correct and timely filing.
If the filing obligation has not been (correctly) observed, creditors can inspect the administration of the company upon authorisation by the subdistrict Court (kantonrechter). Creditors must substantiate their interests in sufficiently concrete terms. Failure to file on time does not count as non-compliance when the Court considers the interests of creditors.
Sanctions under the new law are that managing directors may be penalised and, at the request of the Public Prosecution Service, be prohibited from exercising any directorship of a Dutch company. Such disqualification can be imposed for a maximum term of five years. An appointment in violation of the ban is null and void. Possibly, not observing the legal requirements may also result in personal liability of the managing directors for damages incurred by creditors of the company.
The new law will apply for two years, i.e. until 15 November 2025. The law contains the option of extending this term.
Authored by Chantalle Schoegje.