On 10 May 2011, the upper chamber of the Dutch Parliament passed a bill implementing EU Directive 2009/109/EC – which is intended to simplify the reporting and documentation requirements in the case of mergers and divisions (demergers) – by means of amendments to Book 2 of the Dutch Civil Code. The relevant legislation (Wet strekkende tot vereenvoudiging van verslaggevings- en documentatieverplichtingen fusie en splitsing), which will enter into effect on 1 July 2011, will lead to a significant reduction of the administrative burden for companies engaged in a statutory merger or demerger under Dutch law.
This newsletter briefly describes the main changes under the new rules.
- The most noteworthy simplifications under the new rules are as follows: In the case of mergers and some types of demergers, and under certain circumstances, it will no longer be necessary for the management board to draw up an explanatory memorandum stating the reasons for the merger or demerger and describing its legal, economic and employment-related implications.
- Under certain circumstances, it will no longer be necessary for certain companies to draw up an interim statement of assets and liabilities where, as at the date of the filing of the merger plan or demerger plan, more than six months have passed since the end of the financial year to which the most recently adopted annual accounts or other financial statements pertain. This applies to (i) issuing institutions as referred to in the Financial Supervision Act, e.g. listed Dutch public limited liability companies (NVs), that are party to a merger or demerger, and (ii) companies that are party to a particular type of demerger.
- In the case of certain types of mergers and demergers, it will be possible for the decision to effectuate the merger or demerger to be taken by means of a management board resolution. Furthermore, it will not be necessary for the minutes of the relevant board meeting to be drawn up by notarial deed.