Directors' and Shareholders' Liability as a Means of Protecting Creditors of the BV

Posted: 16 May 2007

See all articles by Marie-Louise Lennarts

Marie-Louise Lennarts

University of Groningen - Faculty of Law

Abstract

This article discusses the proposed changes to the capital maintenance regime applicable to the Dutch BV. The draft legislation introduces a liability of directors for unlawful distributions and an obligation for shareholders to repay distributions made to them in the suspect period of one year prior to the opening of bankruptcy proceedings. The current enhanced balance sheet test is replaced with a simple balance sheet test and a liquidity test. With the proposed new rules on creditor protection, the Dutch legislature aims to balance welfare and fairness: the law should not place unnecessary restrictions on company's financing decisions, but at the same time it should offer effective protection to creditors. The draft legislation has been subjected to a consultation process. The reactions to the consultation document show that it is not easy to strike the right balance between the interests of the three parties involved: the shareholders, the directors and the creditors.

Keywords: creditor protection; capital maintenance; distributions; directors' liability; shareholders' liability

Suggested Citation

Lennarts, Marie-Louise, Directors' and Shareholders' Liability as a Means of Protecting Creditors of the BV. European Business Organization Law Review, Vol. 8, 2007, Available at SSRN: https://ssrn.com/abstract=985535

Marie-Louise Lennarts (Contact Author)

University of Groningen - Faculty of Law ( email )

9700 AS Groningen
Netherlands

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