Are you a member of the board of a horse riding association? Then you should take into account the new regulations ‘Management and Supervision of Legal Entities Act’. On November 10th, 2020, the Dutch Senate passed the bill on the ‘Management and Supervision of Legal Entities Act’. The date of entry into force of this act still has to be determined by Royal Decree. The aim of this new act is to clarify the duties and responsibilities of directors and supervisory directors of associations, foundations, cooperatives and mutual insurance companies. With the entry into force of this new act in particular the following will change:
- The conflict of interest provision that now applies to public and private limited companies will also apply to directors and supervisory directors of (horse riding) associations, foundations, cooperatives and mutual insurance companies. Every director and every supervisory director will not be allowed to participate in decision-making on a subject in which he/she has a conflict of interest.
- Directors and supervisory directors of any (horse riding) associations, foundations, cooperatives and mutual insurance companies can be held liable for improper performance of their duties both in and outside the case of bankruptcy. This implies an extra risk for non-commercial (horse riding) associations and foundations.
- For board members and supervisory directors of (horse riding) associations, foundations, cooperatives and mutual insurance companies, a mandatory statutory incapacity and absence provision shall apply. This means that the articles of association must be amended, in the sense that the articles of association contain a provision for the event that the board is temporarily or permanently unable to fulfill its duties.
Do you have any questions about this article? Please contact Irma Uwe-Ntukabumwe.
