On 23 June 2015, the Bill on Directors Disqualification (henceforth, “Bill”) was unanimously adopted by the Dutch House of Representatives. This Bill introduced the possibility to disqualify managing directors of Dutch legal entities. At request of the insolvency trustee or the public prosecutor, the Court may prohibit a managing director of an insolvent legal entity from becoming, or continuing to be, a managing director or supervisory director of another Dutch legal entity for a maximum period of five years.
The Court may disqualify a managing director if he has manifestly improperly performed his duties within a period of three years before the insolvency. Improper performance will only be assumed, subject to proof to the contrary, if one of the following facts have occurred:
The disqualification rules do also apply to indirect directors, shadow directors and individuals who acted on behalf of their own business. If the insolvent legal entity has a one tier board only the executive directors may be disqualified.
A disqualification becomes effective when the right to appeal the decision to the Court of Appeal or the Supreme Court is expired. The Court may suspend a (former) managing director as managing director or supervisory director of other Dutch legal entities during the process.
Disqualified managing directors will be removed from the Dutch Commercial Register (Handelsregister) and disqualification orders will be registered in a public central register.
The Bill is expected to enter into force as per 1 January 2016, but this date is not final yet.
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