27-07-2011
Amendment Book 2: legal mergers and demergers

Amendment Book 2: Act serving to simplify reporting and documentation requirements for legal mergers and demergers

Book 2 of the Dutch Civil Code was amended with effect from 1 July 2011 in implementation of a European Directive regarding reporting and documentation requirements for legal mergers and demergers. It relates to the easing of various statutory reporting and documentation requirements.

The amendments for a legal merger are:

1.    The Management Board of each of the merging legal entities no longer needs to prepareexplanatory notes setting out the reasons for the merger, the anticipated consequences regarding the activities and clarification from a legal, economic and social perspective unless this is endorsed by the board members or shareholders of the merging legal entities.

2.    Legal entities obliged to prepare a biannual financial report pursuant to the Financial Supervision Act are no longer required to prepare an interim statement of assets and liabilities.

3.    The Management Board of each of the merging legal entities is obliged to inform the General Meeting of Shareholders and the other legal entities to be merged should it appear that assets and liabilities changed significantly after the merger proposal.  The Management Board may waive this obligation subject to the approval of the board members or shareholders of the merging legal entities.

4.    The district court will reject a creditor's claim, if such creditor is unable to make it plausible that the financial position of the acquiring legal entity after the merger will not be able to offer sufficient safeguards for the applicant's claim and that insufficient safeguards have been received from the legal entity.

5.    The company ceasing to exist may, by management resolution, also resolve to merge with effect from 1 July 2011 on condition that such company is a wholly-owned subsidiary of the acquiring company, unless stated otherwise in the Articles of Association.

Legal demerger

The amendments concerning the demerger are largely identical. However, in the event of a demerger, explanatory notes on the merger proposal must, in principle, be prepared.

For more information, please contact Jolanda Vossen on telephone number: 020 301 66 33 or by e-mail: jolanda.vossen@vmwtaxand.nl.

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