Corporate housekeeping means fulfilment of your company’s obligations under corporate law and those set out in its articles of association. If the company is incorporated within a legal entity, you will need to pay attention to the internal functioning of that legal entity, for example the question of who takes which decisions and how they must do so. Attention also needs to be paid to how the company presents itself to the outside world. Have the correct details been registered in the Trade Register, and what obligations does the company have to comply with?
Virtually all legal entities comprise at least two bodies: an executive board and a shareholders’ or members’ meeting. Some enterprises also have a third body, whether or not voluntarily: a supervisory board [raad van commissarissen or raad van toezicht]. These bodies can take decisions independently, but they sometimes also need one another’s cooperation if decisions are to be legally valid. The law, the articles of association, and any regulations stipulate who may take which decisions, what form those decisions are to take, and what requirements must be met. It is important to always observe the relevant formalities in order to prevent decisions being invalid or liable to be overturned at a later date.
Convening and giving notice of meetings
Compliance with the legal formalities and those stipulated in the articles of association is an issue, for example, when organising a shareholders’ meeting. Who is empowered to convene such a meeting, how are shareholders invited to attend, and how is the agenda drawn up? Convening and giving notice of meetings need to be prepared and carried out carefully. Both the executive board and the supervisory board have important duties in this regard. The law and the articles of association also determine how voting is to take place at a shareholders’ meeting. This also requires the involvement of the executive and supervisory boards.
Agenda and management of deadlines
The need to hold an annual shareholders’ meeting is sometimes forgotten. Is that in fact necessary? And when does a decision need be taken on getting an extension of the deadline for drawing up the annual financial statements? Our Corporate Advisory Team will be only too happy to assist you in drawing up and maintaining a long-term schedule for annual meetings. They can also assist you in keeping track of deadlines. Having a schedule of resignations, for example, makes it clear when executive board or supervisory board members need to be appointed or reappointed.
Registration in the Trade Register
Making sure that entries in the Trade Register are correct and complete is also part of good corporate housekeeping. That doesn’t just mean the details of the company; executive directors and supervisory directors must also be registered and deregistered in good time. In order to avoid unnecessary liabilities, you will also wish it to be clear to clients who is managing the company and who is empowered to represent it. Where authority to represent is concerned, it’s good to know that powers of attorney and any restrictions of those powers can also be entered in the Trade Register. The company is then better protected against unauthorised representation. That way, you won’t come in for any surprises.
The UBO register
As of 27 September 2020, enterprises are obliged to register their owners or the persons controlling them in a “UBO” (Ultimate Beneficial Owner) register. In addition to the company being registered in the Trade Register, those with an ultimate interest in the company will also need to be registered in the Trade Register. That means, briefly, the persons with ownership and/or control rights within the company. We’ve already written about this in a number of blogs. Many entrepreneurs have questions about what data will be accessible and for whom, but also about whether the new legislation takes account of the privacy of the interested party or parties.
If you have any questions about our corporate housekeeping service, please contact one of the lawyers in our Corporate Advisory Team.