Bill on the management and supervision of legal entities adopted by Lower House of Parliament

On 28 January 2020, the Lower House of Parliament adopted the proposal to amend the Dutch Civil Code in connection with the standardization and clarification of certain provisions concerning the management board and the supervisory board of legal entities (Management and Supervision of Legal Entities Act). The purpose of this bill is to supplement and clarify the rules for the management and supervision of associations, cooperatives, mutual societies and foundations, in line with the existing rules for NVs and BVs in the Dutch Civil Code. This will meet the needs of practice.

The management and supervision of legal entities has not yet been (sufficiently) regulated by law in a number of areas. For example, different regulations exist for different types of legal entities. The Bill on the management and supervision of legal persons provides a legal basis for the establishment of a supervisory board for associations and foundations and for a one-tier board for associations, cooperatives, mutual societies and foundations. Furthermore, the bill unifies (i) the standard to which directors and supervisors must conform in the performance of their duties, (ii) the rules on the position of directors and supervisory directors with a conflict of interest, and (iii) the rules on the liability of directors and supervisory directors. Another new element is the extension of the grounds for dismissal of directors and supervisory directors of foundations.

On 3 March 2020, the preliminary investigation by the Upper House Committee on Justice and Security will take place. Once the preliminary investigation has been completed, the bill can be discussed in the plenary meeting of the Upper House of Parliament.

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