9.3 Recommendations for amendment or interpretation of the law

1.

Including a statutory definition of shares without voting rights, as follows: ‘A share without voting rights is a registered property right, in the shape of a share issued by the private company with limited liability, that represents capital in that private company, to which the rights are statutorily and according to the articles of association of the private company attached, including the right – limited or not – to profits and/or reserves of same private company, to which share, however, no right is attached to cast a vote in the general meeting’.

2.

Changing the second sentence of Article 2:228, paragraph 5 CC to: “Such an arrangement can only be made with regard to all shares of a specific class or indication of which all shareholders have given their consent, or with regard to all shares of a specific class or indication that have not been issued.”

3.

A better formulation of Article 2:228, paragraph 5, last sentence CC could be: “With regard to shares without voting rights it may not be stipulated on the basis of Article 216, paragraph 7 that those shares provide no right whatsoever to participate in the distribution of profits or reserves of the company.”

4.

The words “of a specific indication” should be added to Article 2:178, paragraph 1 CC.

5.

The management board of the company should be legally required to record the resolutions of the meeting of the shareholders without voting rights in writing.

6.

Drawing up minutes of the meeting of shareholders without voting rights and of the general meeting should be a legal requirement. This will be beneficial to the testing of the resolutions and the decision making.

7.

One of the results of the introduction of shares without voting rights is that it is unclear how the concept ‘the majority of shares’ as referred to in Article 1:88, paragraph 5 CC should be interpreted. This concept is defined by the formal criterion of the company structure and the material criterion of the combination of control and financial interest. With regard to the financial interest component of the material criterion I would like to propose a proportionate minimum limit of ten per cent in the capital of the BV to the number of shares without voting rights held by the acting director.

8.

One of the results of the introduction of shares without voting rights is that it is unclear how the concept ‘the majority of shares’ as referred to in Article 1:88, paragraph 5 CC should be interpreted. This concept is defined by the formal criterion of the company structure and the material criterion of the combination of control and financial interest. With regard to the financial interest component of the material criterion I would like to propose a proportionate minimum limit of ten per cent in the capital of the BV to the number of shares without voting rights held by the acting director.

9.

Considering the background and purpose of Article 43 Faillissementswet (Bankruptcy Act) and more particularly the evidentiary presumption included in that Article, in situations as referred to in Article 43, paragraph 1 sub (4) under (c) and sub (5) under (c) and (d) Faillissementswet I argue in favour of regarding the words ‘at least half of the issued capital’ also to include the shareholder without voting rights with such a capital interest that he holds at least half of the issued capital in the BV.

10.

The concept ‘predominantly able’ as referred to in Article 1:141, paragraph 4 CC should be interpreted as a factual control criterion. In the flex-BV, this criterion does not seem easily applicable due to the introduction of the share without voting rights. This gives rise to arbitrariness. If spouses have agreed upon a regular set-off clause which includes profits from business activities while one of the spouses owns shares without voting rights in a BV, retained earnings in proportion to the share ownership should be taken into account in the settlement.

11.

Article V.2, paragraph 1 first sentence of the Overgangsrecht should read that the management board of the company complies with the provisions of Article 2:194, paragraph 1 last sentence CC in accordance with the obligation of the latter Article that the management board of the company maintains the shareholders’ register.

12.

Article V.2, paragraph 1 last sentence of the Overgangsrecht should stipulate that registration by order of the court or the provisional relief court of the holder of depositary receipts in the shareholders’ register as having the right to attend general meetings gives rise to depositary receipt holder’s rights.

13.

Article V.2, paragraph 6 Overgangsrecht should read that “at the next amendment of the articles of association, the company [must] attach the right to attend general meetings to these depositary receipts pursuant to Article 227, paragraph 2”. According to Article 2:227, paragraph 2 CC the right to attend general meetings is after all attached to depositary receipts rather than to the holders of depositary receipts.

14.

After the first sentence of Article V.2, paragraph 1 Overgangsrecht the following should be added after the full stop: “If there are holders of depositary receipts of shares, which have been issued with the cooperation of the company prior to the law taking effect and the company and its bodies have recognized such or have acted accordingly, the management board of the company immediately after the law coming into effect complies with Article 194, paragraph 1, last sentence.”

15.

After the first sentence of Article V.2, paragraph 1 Overgangsrecht the following should be added after the full stop as well: “If there are holders of depositary receipts of shares to which the right to attend general meetings has been attached, which depositary receipts were issued after the law came into force, the management of the company after the issue of such depositary receipts complies with Article 194, paragraph 1, last sentence.”

16.

Holders of participation certificates with the right to attend general meetings should be registered in the shareholders’ register.

17.

For the protection of the provider of capital with the right to attend general meetings but without the right to vote the legislator should add the words ‘in advance’ to Article 2:238, paragraph 1 CC.

18.

Due to a lack of added value the words ‘assessment of the value of the shares’ in Article 2:181, paragraph 4 CC may be scrapped.

19.

As a simple solution to the conversion of a BV to an NV I put forward the rule that shares without voting rights in a BV become shares with voting rights in the NV.

20.

An even simpler solution for the conversion of a BV to an NV is in my opinion the introduction of shares without voting rights in the NV.

21.

If in a triangular merger or a triangular division the group company is a BV, shares without voting rights in the group company-BV can also be acquired by the shareholders without voting rights of the company ceasing to exist. In such cases the law should provide for an exemption from compensation.