Article 2:19 of the Dutch Civil Code (Burgerlijk Wetboek) lists the grounds on which a legal entity is dissolved (ontbinding), such as a resolution of the general meeting, and regulates what follows. As a rule, the entity continues to exist for as long as needed to liquidate its assets. If it has no assets at the time of dissolution, it ceases to exist immediately. This is known as turbo liquidation (turboliquidatie).
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On what grounds is a legal entity dissolved?
By a resolution of the general meeting or another competent body, by an event set out in the articles of association, after a bankruptcy ends because of the state of the estate or insolvency, by a decision of the Chamber of Commerce in certain cases (Article 2:19a), or by court order. The board then usually acts as liquidator (vereffenaar).
When is turbo liquidation possible?
Only if the company has no assets (baten) at all when it is dissolved. Debts may remain, but there must be nothing left to distribute, including receivables that could still be collected. The board must notify the trade register. If assets later turn out to exist, the court can reopen the liquidation at the request of an interested party (Article 2:23c).
What extra obligations apply since 2023?
Under the Temporary Act on the Transparency of Turbo Liquidation, now laid down in Article 2:19b, the board must file documents with the Chamber of Commerce within 14 days after the dissolution resolution. These include a balance sheet and income statement, a statement explaining why there are no assets, and annual accounts that should have been filed before. Creditors must be informed. These rules apply since 15 November 2023 and have been extended until 15 November 2027. At the request of the public prosecutor, the court can bar a director who breaches these duties or harmed creditors for up to 5 years.
What are the risks for directors?
Directors who paid creditors selectively or emptied the company beforehand can be liable in tort. If there is any doubt whether the company is truly without assets, choose a regular liquidation or consider filing for bankruptcy.
Frequently asked questions
Do the debts disappear with the company?
The company disappears, so creditors lose their debtor. Claims against guarantors or liable directors remain.
Related terms
- Turbo liquidation
- Dissolution and liquidation
- Article 2:11 Dutch Civil Code (liability of corporate directors)
- Article 1 Dutch Bankruptcy Act (bankruptcy petition)
Our corporate lawyers advise on the safest way to wind up a company and on claims after a turbo liquidation. Want to know what this means for your situation? Book a free introductory meeting.
