9.5 Existing legal relationships (Chapter 5)

Chapter 5 prescribes the consequences of change of legal form to present legal relationships such as contracts. The question if and to what extent contracts remains into existence need to be answered in the basis of the general provisions of Books 2, 3 and 6 Dutch Civil Code. There is no specific facility as there is in case of a legal merger or demerger. This is also not necessary as the general provisions as stated before are satisfactory.

Governmental authorities may act as a party to an agreement. In principle the same regulatory provisions as for private parties are applicable. However, in the public interest special provisions are applicable to governmental authorities.

It is advisable for civil law notaries to be attentive to wording in notarial deeds (such as a donation or a last will) because of a possible change of legal form of a legal entity.

A public benefit organisation (algemeen nut beogende instelling) may retain its charitable status after change of legal form only to the extent the organization still meets all the requirements. It is necessary to inform the tax authorities of a change of legal form.

It is not always clear what the consequences are of change of legal form on licences. Depending on the type of licence and the conditions, it may be necessary to apply for a new licence because the licence is deemed to be cancelled. It may be possible to change the name of the licence because of the change of legal form.

Civil law notaries should realise that it is possible to include change of legal form in the share transfer restrictions of a capital company as a situation where shares have to be offered to other shareholders. Change of legal form may lead to change of control. Change of legal form of a limited liability company into a private company with limited liability does not result in change of control. If a shareholder or a member terminates his shareholding or membership at the time of change of legal form change of a capital company into an association, cooperative of mutual insurance company (or vice versa), this may well constitute change of control. Change of legal form from or into a foundation leads to change of control.