Reinier advises national and international companies
reinier.russell@russell.nl +31 20 301 55 55The Management and Supervision of Legal Entities Act will enter into force on 1 July 2021. How does this affect the articles of association of your foundation, association or cooperative association?
The Management and Supervision of Legal Entities Act (MSLEA) will enter into force on 1 July 2021. This brings a lot of changes for associations, foundations, cooperative associations and other legal entities. Why should you have checked your articles of association by a lawyer?
Due to the introduction of the MSLEA, the law for associations, foundations and cooperative associations is aligned as much as possible with that for NVs and BVs. This may have several consequences for the articles of association:
In the following an overview of important provisions from the Management and Supervision of Legal Entities Act is given. On the basis of this you might have to amend your articles of association.
The Management and Supervision of Legal Entities Act regulates what must happen if a director of a foundation, association, cooperative association or mutual benefit organization has a conflict of interest.
On the basis of the Act, a director with a conflict of interest must refrain from voting on management decisions. In the event all directors have a conflict of interest, the decision will be taken by the supervisory board or the general meeting. As there is no general meeting in a foundation, the supervisory board will be competent. If there is no supervisory body, the management will remain competent. In that case, it is important for the management to record in writing the reasons for the decision.
Although the statutory regulation applies if nothing has been regulated in the articles of association, it is wise to align the articles of association regarding this point with the MSLEA. So confusion can be avoided. In addition it can be included in the articles of association which body is competent to take the decision if the management has a conflict of interest.
From 1 July 2021, it will be mandatory to include a prevention from acting and absence arrangement in the articles of association. This contains arrangements for cases in which a director is absent or prevented from acting. You have to include this arrangement in the following amendment of the articles of association in conformity with the MSLEA.
Although it is already possible to establish a supervisory board for associations and foundations, there is still no legislation governing the powers of a supervisory board. Until 1 July 2021, this depends on what is provided in the articles of association. On the basis of the MSLEA, the supervisory board is granted statutory powers, such as the possibility to suspend directors.
If you do not want the supervisory board to be granted such powers, you will have to arrange this in the articles of association. This point will enter into force immediately from 1 July 2021. So if you wish to amend the articles of association regarding this point, this must be done quickly.
Would you like to know whether your organization is ready for the new Management and Supervision of Legal Entities Act? Do you want to have your articles of association checked? Or do you have any other questions about the MSLEA? Please contact us:
A director under the articles of association is appointed by an appointment decision by an authorised body. What might be the consequences if this decision was not established in writing?
The franchise agreement and the distribution agreement are very similar, but there are also important differences. What are the consequences if you conclude a franchise agreement when it is actually a distribution agreement or vice versa? How can you avoid this misunderstanding?
On 1 July 2026, part of the transitional law of the Management and Supervision of Legal Entities Act (MSLEA) will expire. This mainly affects the voting rights of directors or supervisory directors of associations and foundations. When do you need to amend your articles of association?
An important part of corporate governance is compliance with the various rules governing the company. How do you ensure that your company becomes and stays compliant?
The shareholders’ agreement is the most important agreement entered into between shareholders and the company. What matters should you cover in this agreement?
It can have major consequences when a body within the company takes a decision it is not authorised to take. What are these consequences and how do you avoid making a decision in the wrong way?
