9.3 Nature of change of legal form in Dutch corporate law (Chapter 3)

Privatisation is not to be regarded as change of legal form under my definition. Privatisation shares similarities with incorporation, liquidation, legal merger and change of legal form.

The legal concept of 'change of legal form' has developed in various ways and this legal concept has different legal consequences at various times. Under the Act on foundations (Wet op stichtingen) change of legal form was similar to liquidation of a foundation. At that time, even a partial change of legal form was possible (from a foundation to an NV). Afterwards there was a system of universal transfer of title (overgang onder algemene titel). The present system of change of legal form is that of continuity of the legal entity and the maintaining of assets.

The second development is from compulsory to voluntary change of legal form. Change of legal form was at first to avoid compulsory liquidation by law if and to the extent the legal person did not meet the requirements for that legal entity as stated by law. Later, voluntary change of legal form was introduced at the time when change of legal form implied the maintaining of assets. Compulsory change of legal form to avoid liquidation on the basis of section 2:21 Dutch Civil Code still exists.

It is interesting to review German law relating to change of legal form (Formwechsel). Germany has a long history relating to change of legal form. German law has an extensive statutory regulation. Under present German law it is possible to change the legal form of partnerships (personenvennootschappen). It is not possible to change the legal form of foundations. In the view of the legislators a foundation is unsuitable for this legal concept given the nature of this legal entity. As a result specific questions arise under Dutch corporate law that do not exist under Germany, such as blocked assets.

The central concept under German law is the process of evolution of a company (from sole trader to NV and vice versa). Under German law the focus is on the company and not the legal entity to which the company belongs. Dutch law could be regarded more as corporate law whereas German law could be regarded more as company law.

Change of legal form requires amendment of the articles of association. Amendment of the articles of association is part of the change of legal form. In my opinion change of legal form is a form of amendment of the articles of association. Because of the possible far-reaching character of change of legal form, supplementary legal requirements need to be included in the rules on amendment of the articles of association of each private law legal entity that is changing its legal form.