Opinion Combined Company Law Committee (‘GCV’ in Dutch)
The first preliminary draft of the Act on modernisation of partnerships dates back about four years now. After the first amendments in 2019, a second round of amendments took place last November as a result of an internet consultation. For more information on this, please refer to our blog of November 14th 2022.
The story continued on February 9th with an opinion on the second preliminary draft by the Combined Company Law Committee (‘GCV’ in Dutch). The GCV was formed from members of The Netherlands Bar and members of The Royal Dutch Association of Civil-law Notaries.
The GCV starts the content of its opinion on a positive note: ‘The GCV is pleased to see that with the Preliminary Draft, partly adapted in response to the reactions received during the consultation round regarding the first preliminary draft, another good step has been taken. The addition of the regulation on conversion, the proposed implementing legislation and the tax provisions mean that a regulation is now before us that offers the prospect of rapid introduction.’ It continued with some comments.
The silent versus public partnership
A major change brought about by the Act on modernisation of partnerships is the possibility of the legal entity. Here, the main rule is that a silent partnership is no legal entity, while a public one is. The GCV draws the legislator’s attention to the fact that, in practice, confusion may arise as to when to speak of which entity and when a possible switch from silent to public can take place. As a possible solution, it suggests that this distinction should be made on the basis of the commercial register. A registered partnership is public, a non-registered partnership is silent.
To complement this, it broaches the subject of unregistered partnerships that are a legal entity nonetheless. This legal form may arise during the periods when registration has not yet taken place, partners forget or deliberately do not do so. The Commission pronounces that it does not see these cases as justifying the inclusion of a limited legal capacity regime.
A final point regarding the silent and public partnerships concerns the naming of the entities in the law. The GCV recommends using the term “non-public” instead of “silent” partnerships. Arguments for this include the fact that the silent partnership can no longer exist after the introduction of the law. It also recommends including in the law that the given legal entity be clearly evident from the company name. This can take the form of an addition of ‘O.P.’ (public partnership) or ‘C.V.’ (limited partnership), as also takes place with the ‘B.V.’ (limited liability company) or ‘N.V.’ (public limited company).
Introduction of legislation
The GCV further expresses its understanding for the choice to implement the regulations for, inter alia, mergers and demergers at a later date. It does note, however, that it hopes that these regulations will not be forgotten, but will also be implemented in a dynamic manner. Finally, the GCV ‘welcomes’ the inclusion of a conversion regulation in the second preliminary draft, although in its opinion this regulation certainly still needs attention. For the article-by-article comments, please refer to the Commission’s full opinion (in Dutch language).