Abolition of the Certificate of No Objection for NVs and BVs
Abolition of Certificate of No Objection; Incorporate a BV
in One Day
Earlier this year a bill has been submitted to the Lower House
of Parliament arranging for the abolition of the compulsory
application to the Ministry of Justice for a certificate of no
objection for purposes of incorporating public limited companies
("NVs") and private companies ("BVs") and for
amending their articles of association.
Application for a certificate of no objection is currently also
required for the conversion of other legal entities into NVs and
BVs, and for the incorporation and the amendment of articles of
association of NVs or BVs in the case of a legal merger or
division.
Especially for the incorporation of NVs and BVs this will
considerably ease the cost burden and save time; complicated
questionnaires will no longer have to be completed, and
incorporation will not have to be put on hold for two weeks anymore
while waiting for the issue of a certificate of no objection by the
Ministry of Justice.
With the abolition of the requirement of the minimum capital for
the BV, as provided in the bill for the flexibilization of BV law,
the bank statement and the accompanying loss of time in opening a
bank account will also be a thing of the past.
The combination of the two bills will result in the possibility of
incorporating a BV in one day, so to speak, without having a
minimum capital of €18,000. It is not known yet when this will
first be possible: perhaps in January or July 2010. As far as we
are concerned, the sooner the better.
Permanent Control
of Legal Entities
The certificate of no objection is currently part of the
preventive supervision that is exercised by the Ministry of Justice
on the incorporation of NVs and BVs. According to this bill, the
preventive supervision will be replaced by a new system of
permanent control over legal entities in order to prevent abuse.
The legislator has in mind abuse such as VAT carrousel fraud,
financing of terrorism, disadvantaging of creditors and criminal
money laundering.
The information for the purpose of permanent control will be
gathered from the Trade Register (incorporation, relocation, change
of board members (the so-called life course moments), the Municipal
Personal Records Database ("GBA"), the Criminal Records
System ("JDS"), the Central Insolvency Register
("CIR"), the police register, the National Social
Institute ("UWV") and the Tax and Customs Administration.
A combination of these data in coherence may result in the
notification of a risk, based on a risk analysis that indicates an
increased chance of abuse of legal entities. In such a notification
the collected data are passed on to a select group of enforcers
designated by governmental decree, such as the Public Prosecution
Service, the Dutch National Bank, the Authority for the Financial
Markets ("AFM"), the police and special investigative
services like the Fiscal Information and Investigation Service
("FIOD").
In the future, a notification of a risk may also help in the
imposition of a disqualification from office under criminal law. A
proposal to extend the options of imposing the additional sentence
of disqualification from a profession with regard to a number of
financial economic offenses is currently before the Lower House of
Parliament (Parliamentary Papers 2007/2008 31 386). We will come
back to this in a later issue of the
newsletter.
Extension of Control
The new system of permanent control will be extended from NVs
and BVs to include cooperatives, mutual insurance societies,
associations, foundations, European public limited companies,
European Cooperative Societies, and European Economic Interest
Groupings that have their registered offices in the Netherlands
according to their articles of association. In addition,
enterprises belonging to a foreign legal entity having a head of
branch office in the Netherlands will also be included in the scope
of the screening. Under the Trade Registers Act 2007, such legal
entities have to be registered in the Trade Register. As a result
of this extension, the Companies Documentation Act will be renamed
the Control Over Legal Entities Act.
Public welfare companies will not be included in this permanent
control. A bill to arrange this is currently before Parliament.
Other legal entities that will not be under permanent control are
the sole proprietorship, the partnership, the general partnership
and the limited partnership. As soon as the bill on unincorporated
associations of persons is enacted (possibly in January or July
2010), these will become public companies.
The bill creates the possibility to register not only data of
the spouse, registered partner or companion, as is already possible
at present, but also data of parents, children and grandchildren of
the natural person involved in the legal entity. According to the
legislator, experiences in test settings have proved that it is
necessary to involve the parent/(grand)child relationship in the
analysis, because this type of relationship is relatively often de
facto involved in the legal entity, is often used for abusive
purposes, and often carries an increased risk of circumvention
(straw man) constructions. The criminal and financial records of
the family members of persons who are involved in legal entities as
incorporators or directors will be checked.
Information
For further information about the bill (31 948) discussed above and
the other bills mentioned above, please contact the attorneys and
(junior) civil-law notaries of the Corporate law/ Notarial law
group.