Dutch company law status update 2024

Fully digital general meeting of legal entities
This bill aims to enable NVs, BVs, SEs and associations (including cooperatives) to hold fully digital general meetings. The bill on digital meetings (Wet digitale algemene vergadering van privaatrechtelijke rechtspersonen) introduces additional requirements for both fully digital and hybrid general meetings. It also aims to simplify and modernise the digital convocation process for general meetings. The bill was submitted to the Lower House on 11 January 2024, following a public consultation in December 2022. The current expectation is that the bill will enter into force on 1 January 2025. For more information, please see our latest update.

Amendment of shareholder dispute resolution proceedings and access to inquiry proceedings
On 13 November 2023, a bill was submitted to the Lower House to amend the shareholder dispute resolution proceedings and to clarify access to inquiry proceedings (Wet aanpassing geschillenre­ge­ling en verduide­lij­king ont­van­ke­lijk­heids­ei­sen enquê­te­pro­ce­du­re). The bill aims to make the existing shareholder dispute resolution system more effective and to clarify the admissibility criteria for the inquiry proceedings. Amongst others, the dispute resolution proceedings will become so-called petition proceedings, which generally allow for more flexibility, and will be conducted in first instance before the Enterprise Chamber of the Court of Appeals in Amsterdam, a specialised court. No date has been set for its entry into force. For more information, please see our latest update.

Risk management statement in the Corporate Governance Code
In December 2023, the so called supporting parties of the Corporate Governance Code and the Institute of Chartered Accountants (NBA) reached an agreement on the inclusion of a risk management statement (verklaring omtrent risicobeheersing: VOR) in the code. The starting point is that listed companies will start incorporating a VOR in their management report for the first time for the financial year beginning on or after 1 January 2025. The main proposed elements of the VOR include: (i) a statement that the internal risk management and control systems provide at least a limited level of assurance that sustainability reporting does not contain material inaccuracies; (ii) a statement about the level of assurance these systems provide in effectively managing operational and compliance risks; and (iii) an explanation of the manner in which the aforementioned statements are substantiated. Given time constraints, it was decided not to conduct additional public consultation. The working group considers this a one-time exception, maintaining the trend of self-regulation that has been the foundation for the development and revision of the Code.

Directive on adjusting the size criteria for SMEs
On 21 December 2023, the Delegated Directive (EU) 2023/2775 was published in the Official Journal of the EU, which adjusts the financial thresholds to determine if undertakings qualify as small, medium or large. The thresholds are increased with approximately 25%. The threshold relating to the number of employees remains unchanged. Under the new thresholds a company is ‘large’ if it exceeds two of the following three criteria on two consecutive balance sheet dates: i) a balance sheet total of more than EUR 25 million; ii) net turnover of more than EUR 50 million; or iii) an average number of employees of more than 250. As a result of the increase in the size criteria, fewer companies qualify as large and therefore the scope of certain key legislation such as the Taxonomy Regulation, the CSRD, the Dutch Diversity Act and Dutch Bill on Responsible and Sustainable International Business Conduct is reduced. Member States should enforce the new size criteria from financial years starting on 1 January 2024. However, they have the option to permit companies to adopt the new size criteria for financial years beginning on or after 1 January 2023. According to the Dutch draft implementation decree, the Dutch government intends to make use of that option. The draft implementation decree is pending before the Council of State for opinion.

Corporate Sustainability Reporting Directive (CSRD)
On 20 November 2023, a Dutch draft decree implementing certain CSRD obligations was published. This is the second part of the two-stage implementation of the CSRD. Previously, on 17 July 2023, a draft implementing bill was published for consultation, which addressed, among other things, the assurance of CSRD reports in the Netherlands. The current second stage consists of a draft decree (Implementatiebesluit richtlijn duurzaamheidsrapportering) that encompasses several crucial definitions, outlines the Member State options chosen by the Dutch legislator, and designates the European Sustainability Reporting Standards (ESRS) as the basis for reporting. The ESRS were published in the Official Journal of the EU on 22 December 2023. The CSRD and ESRS will take effect for the largest listed companies in 2024. As the requirements are extensive and specific, it will require a significant effort for most companies to comply with the CSRD. For more information, please see our latest update.

Corporate Sustainability Due Diligence Directive (CSDDD)
On 14 December 2023, the Council and the EU Parliament reached a provisional agreement on the CSDDD. The CSDDD will require large companies (including certain non-EU companies) and medium-sized companies operating in high-risk sectors to conduct due diligence on the human rights and environmental impacts of their own operations and those of their subsidiaries and the business partners in their supply chains. Notable changes to the Commission’s proposal include that the mandatory climate plan must align with the European climate neutrality targets, including fossil fuel-related exposures. Among other things, the plan should contain time-bound reduction targets in five-year steps from 2030 to 2050 for the company’s Scope 1, 2 and 3 emissions. Although financial service providers fall within the scope of the climate plan obligation, they will only have to conduct due diligence on their own and upstream operations. In addition, the provisions on directors’ duty of care were deleted.

Update: On 30 January 2024, the final text was published by Member of European Parliament Axel Voss. This will be voted in Council on 9 February 2024 and in the JURI committee on 13 February 2024. A final vote in plenary will follow, most likely in April 2024. We expect the directive to enter into force in three to four years’ time. The CSDDD largely overlaps with the Dutch bill on Responsible and Sustainable International Business Practices (see below). For more information on the CSDDD, please see our latest update.

Responsible and sustainable international business practices
In September 2023, the bill on Responsible and Sustainable International Business Practices (Wet verantwoord en duurzaam ondernemen) was amended and clarified. Among other things, the amended proposal shifts the responsibility for due diligence from the directors to the company and clarifies that only failure to report is punishable. In addition, the climate plan will no longer have to be drawn up separately but will be included in the action plan. An individual CO2 reduction target may be set, instead of the 55% target previously prescribed. There is no longer a planned date of entry into force, as the initial ambition of 1 July 2024 is no longer feasible. The proposal largely overlaps with the European CSDDD. Regardless of the differences, companies need to prepare for the due diligence requirements that will become applicable through either of the proposals. For more information, please see our latest update.

The following legislative procedures had little or no new developments in 2023:

• Social BV Act - a consultation was scheduled for the first quarter of 2023, but did not take place.
• Equal Pay for Women and Men Act (including reporting obligations) - pending before the Lower House, no updates since 2021.
• Transfer of Undertakings in Bankruptcy Act – a consultation took place in 2019, submission to the Lower House was scheduled for the last quarter of 2023 but did not take place.
• Act extending shareholder notification obligations – a consultation took place in 2019; no updates since then.
• Modernisation of partnerships Act – the last consultation was in October 2022; no updates since then.
• Central Shareholders' Register - pending before the Lower House; no updates since 2019.