When approving the annual report, reviewing the terms of office of supervisory and management board members and auditors, and extending these, if necessary, is advisable.
Under amendments applicable from January 2011, management board members of a private limited company may be appointed for an unlimited term unless the articles of association prescribe a fixed term. By law, the term of office of supervisory board members is five years unless a shorter term is prescribed by the articles of association. The law does not limit the term of authority of an auditor, but shareholders may nevertheless decide on a limitation at a general meeting.
Often the terms of office of supervisory and management board members have been extended but relevant documentation has not been filed with the commercial register. Documentation on extending terms of office of supervisory and management board members should be filed with the commercial register immediately. If information on extension of the term of office of management board members is not reflected in the commercial register, this may cause problems in communication with the authorities and may have consequences in terms of disputes pertaining to proper rights of representation. As a result a fine may be imposed on the person obligated to file data or the company. In addition, compulsory dissolution of the company may be initiated by the commercial register.