The new Flex BV legislation (Act on simplification and flexibilization of the rules on Dutch private companies with limited liability; Wet vereenvoudiging en flexibilisering bv-recht: the “Flex BV Act”) does not contain any amendments to the obligations to prepare and adopt or approve the financial statements:
– the board is required to prepare the financial statements within five months after the end of the financial year;
– the general meeting may grant an extension of six months on grounds of extraordinary circumstances;
– the general meeting then has two months to approve and adopt these financial statements;
– finally, the board must file these adopted financial statements at the commercial register of the Chamber of Commerce within eight days.
The maximum time period in which this must take place is thirteen months therefore: assuming a financial year that coincides with the calendar year, everything must have been done by the beginning of February of the subsequent calendar year.
With the introduction of the Flex BV legislation, the financial statements can also be adopted outside of a meeting and an official meeting no longer needs to be convened for this.
There is also something else to be aware of if all the shareholders are also director of the company: in that case the signing of the financial statements by all the directors and supervisory board members also serves as adoption of the financial statements by the general meeting. The signature is therefore in fact a resolution taken outside of a meeting and this manner of adoption also serves to grant discharge to the directors (and the supervisory board members). This is on condition however that all other persons with meeting rights (such as holders of depositary receipts for shares or pledgees with meeting rights) have been given the opportunity to read the financial statements prepared and have consented to this manner of adoption. As stated above, the board must file the financial statements within eight days after adoption. In the example above this means that all this must have already taken place by the beginning of December at the latest!
If a company wants the financial statements to always be adopted by the general meeting and a separate resolution to be required in or der to grant discharge to the directors (and supervisory board), it is possible to exclude this automatic adoption and discharge in the articles of association.
If the articles of association still currently contain a provision that adoption of the financial statements does not automatically serve as discharge of a director and supervisory board member, the articles of association must be amended on this point in order to be able to utilise the possibility of allowing automatic adoption and discharge. As stated, however, the condition does apply that all shareholders must also be director of the company.
Anne Claire Sillevis Smitt
candidate civil-law notary