The turboliquidatie van de Besloten Vennootschap

Article 2:19 paragraph 4 of the Dutch Civil Code offers the option to dissolve a private company without liquidation proceedings if that company no longer has any assets at the time of the dissolution (turbo liquidation). The private company ceases to exist as soon as the dissolution is finalised. As no liquidation proceedings are required, the turbo-liquidation is seen as a cheap and quick way to dissolve a private company. This assumption, however, turns out to be incorrect. Although turbo liquidation is applied widely in practice, there are certain aspects relating to the content and impact of the provision that have not been carefully considered. Moreover, turbo-liquidation appears to create opportunities for fraud that limits personal risks. This clearly indicates a need for amendment to the legislation.