Temporary Turbo Liquidation Transparency Law enters into force
The Temporary Turbo Liquidation Transparency Act came into effect (for a period of two years) on Wednesday 15 November 2023. The main aim of the law is to increase transparency in turbo liquidations in order to improve the information creditors are able to get access to.
A company that wishes to terminate its business can ask the shareholder(s) to decide to do so. If the company does not have any
The assets of a Dutch company reflect the value of all that the company possesses
» Meer over assets assets at the time of dissolution, the company will cease to exist immediately. This is referred to as a turbo liquidation.
The turbo liquidation of a company is also possible if creditors have remained unpaid, but filing for your own bankruptcy in that case is not an obvious option. Before the Temporary Turbo Liquidation Transparency Act came into effect, a creditor confronted with a turbo liquidation could not, in principle, take direct action against it; but things have now changed. The Temporary Turbo Liquidation Transparency Act contains an accountability and disclosure obligation for the board.
Accountability and disclosure
The board must file the following documents with the Chamber of Commerce trade register within fourteen days after the dissolution:
- statement of income and expenditure (final
A financial method to show how a company is doing financially.
» Meer over balance sheet balance sheet) of the financial year in which the turbo liquidation takes place;
- written explanation of the lack of benefits at the time of the turbo liquidation;
- written explanation of the failure to pay creditors (if applicable);
- written explanation of how the benefits of the legal entity have been monetised and the proceeds have been distributed (if applicable);
- annual accounts for the years prior to the year in which the company was dissolved and for which the statutory filing obligation has been violated.
The board must then inform the creditors of the liquidated company that the aforementioned documents have been filed with the Chamber of Commerce.
Right to view
If the board does not or does not correctly fulfil its accountability obligation, the creditors can request the sub-district court judge to allow them to inspect the deposited administration of the dissolved legal entity. For such a request to be granted, the creditors must substantiate their interest in the request in a sufficiently concrete manner. Failure to comply with accountability also constitutes an economic crime.
If there are unpaid creditors at the time the legal entity is dissolved, and the obligations incumbent on the board (accountability and disclosure) have been violated, the law provides the Public Prosecution Service with an opportunity to request a director disqualification. A director disqualification can also be requested if the directors have previously been involved in turbo liquidations that left creditors unpaid. Director disqualification applies for a maximum of 5 years and means the person on whom the ban has been imposed cannot exercise a position as a director or
body of a limited company or association that supervises the executive policy of the legal person
» Meer over supervisory director supervisory director during that period.