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Netherlands: Update on bill to modernize partnership law

Netherlands: Bill to modernize partnership law

A bill to modernize partnerships aims to bring the partnership law in line with the needs of current practices, and to facilitate entrepreneurship, offer certainty in respect of business transactions, and provide appropriate protection for both partners and those who trade with the partnership.

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Among the changes in the pending legislation:

  • The bill would provide for just two legal forms: the partnership and the limited partnership (commanditaire vennootschap “cv”).
  • The bill would not require a notarial deed to set up a partnership and limited partnership (an important change given that legal personality would be obtained without the intervention of a notary).
  • The bill would provide that partnerships would have “legal personality.”
  • The bill would codify case law that all partnerships have separated assets.
  • The bill would aim to simplify entry and exit on the basis of an existing partnership agreement.
  • The bill would have explicit rules for the establishment of a usufruct or a pledge on certain rights from the legal relationship between partner and partnership, particularly when distribution rights are concerned.
  • The bill would reflect changes to the rules for dissolution of a partnership.
  • The bill would leave governance in the hands of all partners jointly.
  • The bill would provide all partners in a partnership would be jointly and severally bound to perform the partnership’s obligations.
  • The bill would allow a limited partner to perform management activities on behalf of the limited partnership, provided that there is a power of attorney from the other partners.
  • The bill would not change the rules for corporate form, merger and division of partnerships.

The consultation on the bill runs until 31 May 2019.
 

Read a March 2019 report prepared by the KPMG member firm in the Netherlands

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