The Dutch government submitted the bill on 15 January 2024. If passed, the new law would permanently allow Dutch companies and associations to hold general meetings in a virtual-only format.
The former draft bill published for consultation in December 2022 has been left mostly intact - see our earlier article outlining the key elements of this draft bill for BVs and NVs, including the bill's scope and the opt-in requirement. Some changes have been made compared to the draft bill, which are highlighted below.
Main elements of the bill
The bill aims to provide a permanent legal basis for Dutch companies and associations to hold virtual general meetings accessible only by electronic means (virtual-only meetings). If passed, this meeting form would be available in addition to the two existing forms for holding general meetings: in-person-only meetings, and hybrid meetings accessible both in-person and electronically.
As the bill applies to all Dutch companies, it would apply to all BVs and NVs. It also applies to Dutch associations, owners associations and mutual insurance associations, and to SEs (European Companies) and SCEs (European Cooperative Societies) with their corporate seat in the Netherlands.
A virtual-only or a hybrid meeting will only be permitted if a company's articles of association provide these options. Because of this, most companies would first need to amend their articles of association before being able to hold virtual-only general meetings.
The bill also lists other requirements for virtual-only meetings:
- the meeting notice must state the procedure for participating electronically in the meeting;
- electronic voting at the meeting must be possible;
- participants must be able to directly participate in the meeting via a two-way audio-visual means of communication; and
- it must be possible to identify participants via that means of communication.
The bill proposes aligning hybrid-meeting requirements with virtual-only requirements. This means that hybrid meeting participants must be able to directly take part in the meeting via a two-way audio-visual means of communication (while existing legislation does not require this),
The bill further proposes providing non-listed NVs with the ability to give notice of their meetings via their website.
Main departures from the draft bill
Below are the key changes as compared to the draft bill.
Direct shareholder participation
Currently, in order to validly organise a hybrid meeting, shareholders must be able to electronically vote and directly take note of the meeting. There is no requirement that shareholders should also be able to participate in the meeting electronically.
The draft bill provided that in virtual-only and hybrid general meetings, shareholders participating electronically had to not only be able to vote and directly take note of the meeting, but that they also had to be able to participate in the meeting electronically. The draft bill did not make clear whether shareholders participating electronically had to be able to directly participate in the meeting.
The bill as now submitted clarifies that shareholders participating electronically should be able to participate directly in the general meeting, meaning any shareholder should be able to directly address all other participants in the meeting.
A virtual or hybrid general meeting requires a two-way, audio-visual means of communication through which shareholders can participate in the meeting. The bill clarifies that this audio-visual means of communication should also allow for identification of the shareholder. This had not been made explicit in the draft bill.
Giving notice of meetings for non-listed NVs
Currently, NVs without a listing on a regulated market can give notice of their general meetings in a Dutch nationally distributed newspaper.
The draft bill removed this option, requiring all such NVs to give notice via their website. The bill as now submitted makes it possible again for such NVs to give notice in a Dutch nationally distributed newspaper, recognising that not all these NVs may have a website via which they can give notice.
Electronic notice via email for non-listed BVs
Currently, BVs without a listing on a regulated market can only give notice to their shareholders electronically (for example, by email) if their shareholders consent.
The draft bill proposed removing this requirement for individual shareholder consent, allowing all BVs to give notice to shareholders electronically. The draft bill indicated that shareholders should provide an email address for this specific purpose. The bill as now submitted clarifies that shareholders do not have to designate an email address specifically for this purpose, but rather that the BV may use the email address for a shareholder that it has on file.
The same applies to holders of registered shares in NVs.
Transitional provision included
The Covid-19 Emergency Act temporarily permitted virtual-only general meetings, but the availability of this option stopped on 1 January 2023. Any resolutions adopted after 1 January 2023 that relied on the provisions of the Covid-19 Emergency Act may be invalid.
The bill as now submitted provides for a transitional provision under which such resolutions can be ratified. Such ratification must be done by the general meeting, and is only possible if all immediately interested parties have treated the relevant resolutions as valid, and provided that any rights obtained by third parties are respected. The draft bill did not include these options.
During the consultation phase, several suggestions were made that - in the Dutch government's opinion - fell outside the scope of the bill. These included enabling Dutch NVs to hold general meetings outside the Netherlands. The explanatory notes to the bill indicate that such suggestions may be considered separately as part of the modernisation of Dutch NV law.
The bill is now pending in the lower house of the Dutch parliament, and is subject to further amendments as part of the legislative process. It is still unclear when a final act will enter into force.
Since the bill proposes an opt-in system (where companies can only hold virtual general meetings if their articles of association provide that option), companies may consider paving the way. They can do this by proposing the necessary amendments to their general meeting, for example, at their upcoming annual general meeting. This way, once the bill becomes effective, the option to hold virtual general meetings will be immediately available.