New rules on turboliquidation as early as 2019 announced. Recently, the bill for internet consultation submitted. A boom in (turbo) liquidations is expected as a result of the corona crisis. That is where the new rules should apply. The Temporary law on turboliquidation was submitted to the House of Representatives on 7 July 2022.
Turboliquidation
The normal procedure surrounding the termination (liquidation) of a BV is as follows:
- the shareholders' meeting takes the decision to dissolve the legal entity;
- this decision is registered in the commercial register (with the Chamber of Commerce);
- the assets are liquidated;
- and after the liquidation is completed, this is reported to the Chamber of Commerce, after which the BV ceases to exist.
In a turboliquidation, the last two steps are omitted. After the registration of the resolution for dissolution, the BV immediately ceases to exist. A turboliquidation is only possible if the BV has no assets. It does not matter whether there are debts.
Abuse
The current turboliquidation regime offers opportunities for abuse. After all, the legal entity, which has ceased to exist, may still have debts. Creditors are then left with a debtor that no longer exists. A legal entity with debts should be wound up through bankruptcy.
Transparency
To prevent this misuse, the board is required to disclose the following information (to be filed with the Chamber of Commerce):
- balance sheet and statement of income and expenditure for the financial year in which it is dissolved;
- a written statement of the reason for the lack of benefits;
- a final distribution list (if creditors have been satisfied prior to dissolution);
- previous years' financial statements, to the extent that the publication requirement has not already been met.
NOTE: this obligation also applies if the dissolved legal entity no longer has any debts.
As a result, the settlement of a (turbo) liquidation will become more laborious and therefore more costly.
Governance ban
In addition to the filing obligation described above, the possibility is introduced under which the court can impose a prohibition to manage legal entities. This can be done when directors:
- failed to comply with the filing requirement in the context of a turboliquidation;
- deliberately disadvantaged one or more creditors in the run-up to the liquidation;
- have repeatedly been involved in a dissolution without assets, leaving behind debts.