Cross-border Conversion, Merger and Demerger Act to enter into force on 1 September

The Act implementing the Directive on Cross-Border Conversions, Mergers, and Demergers will enter into force on September 1st. This is stated in the entry into force decree published today in the Government Gazette along with the Act.

The law and its entry into force decree follow the recent adoption of the bill by the Senate . The new legislation implements Directive (EU) 2019/2121 (Mobility Directive) and includes transitional arrangements for existing cross-border transactions.

Fraud test
The notary is designated as the competent authority in the Netherlands to issue the pre-certification and the final certificate. A fraud test is introduced for the pre-certification. If the notary determines that the cross-border conversion, merger, or demerger was set up for unlawful, fraudulent, or criminal purposes, they must refuse their services and not issue the certificate.

Practical guidelines
The law allows the Royal Dutch Bar Association (KNB) to issue practical guidelines for the fraud assessment. The KNB is working on this in close consultation with experts in the notarial field. The goal is to have these practical guidelines ready before the new legislation takes effect.