Reinier advises national and international companies
reinier.russell@russell.nl +31 20 301 55 55On 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?
The Management and Supervision of Legal Entities Act (Wet Bestuur en Toezicht Rechtspersonen; WBTR) contains measures to improve the quality of management and supervision at all associations and foundations, from small to large. With the entry into force of the MSLEA, a lot has changed with regard to the legal requirements of the statutes of associations and foundations. For instance, the law sets requirements for the voting rights of directors and supervisory directors and contains regulations in case of conflicting interests.
For the voting rights of directors and supervisory directors, the MSLEA has a transitional arrangement. However, this regulation will expire on 1 July 2026, meaning that from then on all articles of association must comply with these rules from MSLEA. In this blog, following our earlier blog on the MSLEA, we set out the main requirements of the MSLEA.
When you amend the articles of association of your association or foundation, the following points must be regulated:
For the NV and the BV, the articles of association allow directors or supervisory directors to have more than one vote, provided that a director or supervisory director cannot cast more votes than the other directors or supervisory directors combined. The Civil Code did not yet contain a regulation regarding multiple voting rights for managing or supervisory directors of associations and foundations. The MSLEA ensures that the same rules apply to them as for NVs and BVs.
If an association or foundation had included multiple voting rights in the articles of association before the entry into force of the MSLEA – 1 July 2021 – that exceeded the legal limit, this arrangement will remain valid until the next amendment to the articles of association or at the latest five years after the date of the entry into force of the MSLEA, i.e. until 1 July 2026. After this date, no director or commissioner of an association or foundation may have the right to cast the majority of votes. Therefore, if your association or foundation still has such an arrangement, it is necessary to bring it into line with the MSLEA soon. If you fail to do so, the multiple voting rights of the relevant director or commissioner will lapse.
The MSLEA obliges all legal entities to have a regulation on suspension and absence, as was already the case for BVs and NVs. It must be included in the next amendment of the articles of association. There is no deadline for this amendment of the articles of association.
The regulation for suspension and absence regulates the manner in which the management of the legal entity is provisionally regulated in the event of the suspension of absence of one or more managing or supervisory directors. With ‘suspension’, a director is still in office, but temporarily unable to exercise it, e.g. in case of long-term illness or suspension. The articles of association may stipulate when an inability to act is such that the rules on suspension apply. In the case of ‘absence’, a director ceases to hold office, e.g. due to death, resignation or dismissal.
Under the old law, for the association and cooperative there was an external conflict-of-interest regulation, whereby the general meeting could appoint one or more persons to represent the legal entity if one or more directors or supervisory directors had a conflict of interest. The foundation had no statutory conflict of interest regulation.
The MSLEA ensured that the conflict-of-interest rule applies to all legal entities, as it does to NVs and BVs. This means that a director may not participate in deliberations and decision-making if that director has a direct or indirect personal interest that conflicts with the interest of the legal entity.
If disregarding such director(s) prevents a decision from being taken, the law contains an escalation rule. This escalation rule means that the Supervisory Board takes the decision in that case. If no Supervisory Board has been set up or if no decision of the Supervisory Board can also be taken due to conflict(s) of interest of one or more officers, the general meeting takes the decision, unless the articles of association provide otherwise.
In the case of foundations, the escalation rule only applies to the extent that a Supervisory Board has been established, as the foundation does not have a general meeting. If this is not the case, the board remains authorised to take the decision, whereby the board must put in writing the considerations underlying the decision.
Although the statutory rule applies if nothing is stipulated in the articles of association, it is still wise to align your association or foundation’s articles of association with the MSLEA on this point. For example, you can include in the articles of association which body is authorised to take the decision if the board has a conflict of interest. This can avoid confusion or unintended authority of another body.
We advise you to examine or have examined your articles of association for the possibilities under the MSLEA. As shown above, multiple voting rights should be brought in line with the MSLEA before 1 July 2026. Also, the rules on suspension and absence should be brought in line with the MSLEA when the articles of association are next amended.
If your association or foundation still has old articles of association that need to be brought into line with the MSLEA, this could be a good opportunity to also take a look at the rest of the articles of association. In addition to the issues mentioned earlier, you may also want to consider, for example establishing a supervisory board and/or including a division of tasks in the articles of association. We would be happy to help you assess the articles of association and, if necessary, amend them, so that the articles of association are again up-to-date and tailored to your organisation. Please contact us:
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