The Flex BV Act that entered into effect last year requires the details of holders of depositary receipts with meeting rights to be included in the shareholders register before 1 October 2013. This article describes what happens if a company fails to fulfil this requirement.
Under new Flex BV Act, implemented last year, details of holders of depositary receipts with meeting rights must be included in the shareholders register before 1 October 2013. The requirement concerns depositary receipts issued with the company’s cooperation before the Flex BV Act took effect on 1 October 2012.
Entering depositary receipt holders in the shareholders register shows that they have the right to attend general meetings even if the articles of association do not yet have a provision to that effect. Entry in the register, including address details, is also needed to send notices of general meetings to the individual depositary receipt holders.
BVs will have to specifically provide for the meeting rights of the depositary receipt holders when they next amend their articles of association.
What are the consequences if the company fails to fulfil this requirement?
There is no explicit sanction for failure to enter these depositary receipt holders in the shareholders register. Meeting rights of depositary receipt holders can still be entered after 1 October 2013 at the holder’s written request or on the company’s own initiative. As long as the details of a depositary receipt holder are not entered in the shareholders register, the old law will apply. This means that the depositary receipt holder will have to be notified of a general meeting via an announcement in a national newspaper, unless the articles of association provide otherwise.
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