Corporate Governance and Supervision Act. Avoid hassle. Amend the articles of association!

On July 1st of this year, the rules in the Civil Code for directors and supervisors of legal entities, such as private limited companies (BVs), associations, cooperatives, and foundations, will change. This will also affect local tennis clubs, yoga clubs, and small local foundations, such as those running a petting zoo.

What will change? Until now, the law has no rules for commissioners or other supervisors. Current practice is that supervisors have a complex set of rights and obligations.

Streamline the rules? Adjust the bylaws!

The new law, the Corporate Governance and Supervision Act (WBTR), streamlines these rules by incorporating a basis for appointing supervisors for associations, foundations, and cooperatives. Importantly, this law requires entities to include rules in their articles of association specifying who will perform the duties and exercise the powers if all the directors of the legal entity are temporarily or permanently unable to do so.

The rules for the liability of directors and supervisors in the event of bankruptcy are also being expanded. This only applies, however, if the legal entity is required to file a corporate tax return. Therefore, the directors of a sports club are not affected by this. Nor are the directors of the Children's Farm Foundation.

Reason to consult not only the articles of association, but also the insurance policy for directors' liability!

WBTR in brief

The WBTR is about:

• Position and duties of board members and supervisors.
• The liability of directors and supervisors.
• Financial policy and approval of expenditures.
• Rules regarding conflicts of interest.
• Procedures for major expenses or investments.

Why do you want this?

• No hassle in your association.
• Protecting board members from personal liability.
• New board members show that things are in good order.

Don't wait too long

The WBTR is a legal requirement for associations and foundations. The law applies to all boards. Compliance is mandatory by July 1, 2021. This is important because failure to comply with the WBTR can have personal consequences for board members. Therefore, you can carefully prepare for the change with us. It is also beneficial to consider digital meetings and voting. After the current "emergency coronavirus law" expires, digital voting within legal entities will only be permitted if the articles of association permit it.






This article is taken from "Met Recht Geregeld", a product of FBN Juristen.

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