The Reform of Dutch Private Company Law: New Rules for the Protection of Creditors

Abstract

A Bill to amend Dutch private company law is currently pending before the Dutch Parliament. In our paper, we discuss the proposed rules for the protection of creditors of Dutch private limited companies (BVs). In order to give an insight in the background of the proposals, we first summarise our study on alternatives for capital protection, which served as a basis for the legislative proposals. Next, we point out what criticisms were made during the consultation following the publication of the draft Bill in April 2006 and how the legislature responded to these criticisms. We show that certain controversial provisions have been amended as a result of the outcome of the consultation process. Our paper ends with a few remarks on the rather limited amendments made to Directive 2006/68/EC. We conclude that after the implementation of the Bill, the rules on creditor protection applicable to Dutch BVs and Dutch NVs (public companies) will differ considerably. In our view, there is no reason to fear that the new creditor protection rules applicable to the BV will lead to increased popularity of the NV, as has been suggested by some. Time will tell whether the fundamental reform of the law applicable to the Dutch BV renders it well-equipped to contend with foreign competition.