Modern business law reinforces Dutch business climate

The government continues the modernisation of business law. For example, a new scheme will be introduced for so-called partnerships, the public limited company law will be adapted and companies will have more opportunities to restructure through a change of corporate form, merger or a division. This is described in the memorandum Progress modernisation business law, with which the cabinet agreed on the proposal of Minister Van der Steur of Security and Justice.

A good legal infrastructure promotes the business climate in the Netherlands and reinforces the competitive power of Dutch companies. It is therefore important to maintain and modernise this legal basis for the business sector in an adequate way.

The public limited company law will become more simple and more flexible. For example, by easing the decision-making outside a meeting. It will also be examined whether there is a need for a change in the right of depositary receipt holders, for non-voting and non-profit shares and for a shorter period for convening the general meeting of shareholders.

Following the development that more listed companies have an auditing shareholder, it will also be assessed whether minority shareholders are sufficiently protected. Furthermore, the government wants to prevent that shareholders can keep their identity secret to bearers in Dutch public limited companies. This should counter misuse, tax evasion and money laundering.

The current scheme to cream off price increases of administrators in the event of a takeover is too complex and not effective enough, according to the evaluation. This is why the government will adapt the scheme. It is conceivable to give more room to the supervisory board of public limited companies to adapt the remuneration of an administrator following major decisions, such as a takeover, irrespective of the place of the stock exchange listing.

The rules for partnerships such as the professional partnership, general partnership and the limited partnerships have become outdated. A change is required to match these different legal forms more adequately with the needs of a company, also in an international context. Public partnerships will obtain legal personality after registering in the Commercial Register. This makes it easier for partners to join and leave. Administrative expenses are reduced.

Finally, the government is considering to introduce a scheme for national and international change of corporate form of legal entities. This means that businessmen can respond more adequately to changing circumstances. For example, a businessman can start an own private limited company and later merge with a private limited company of another businessman. Larger companies also regularly require restructuring. The aim of the government is to facilitate these changes as well as possible.

The cabinet has agreed with sending the memorandum Progress modernisation business law to the House of Representatives.