14 April 2020 - Despite all the social distancing measures, we can all be affected by the coronavirus. Of course, especially as an entrepreneur, you will want to have your affairs well organised in case you are unexpectedly unable to work for a while. A general power of attorney (living will) and/or depositary receipts for shares may be a solution.
A living will is a registered notarial deed in which you make your wishes and instructions known in case situations arise during your life which temporarily or permanently prevent you from expressing your will and/or looking after your own interests. In the living will, you grant a power of attorney to one or more persons who may act on your behalf in such a situation. These are referred to as attorneys-in-fact.
The wishes and instructions in the living will may relate to various interests, for example your personal interests (including representation towards banks as well as medical matters) and your business interests. In respect of these interests, you may appoint several persons as attorneys-in-fact. It is important that the attorney-in-fact is someone you trust unconditionally, because the attorney-in-fact is given far-reaching powers of representation.
ISSUANCE OF DEPOSITARY RECEIPTS FOR SHARES AND APPOINTMENT OF SUCCESSOR BOARD OF TRUST OFFICE
Is your enterprise operated in a private company with limited liability (besloten vennootschap)? In that case, the issuance of depositary receipts for shares may also be a future-proof solution. There are several restrictions on the granting of a legally valid power of attorney in the capacity of director of a company. It is therefore possible that the living will does not offer a suitable solution for the protection of your business interests. With regard to your business interests, a security mechanism can be built in by means of depositary receipts for shares.
Depositary receipts lead to a division between economic entitlement and control over the shares. This division separates control over the shares from the right to their value.
Upon the issuance of the depositary receipts for shares, the assets are transferred to a legal entity set up for that purpose, usually a trust office in the form of a foundation (the so-called Stichting Administratiekantoor, which is referred to as 'STAK'). The STAK acquires control over the shares for which depositary receipts have been issued and is obliged to manage the assets. However, the board of the STAK does not manage the assets for its own account, but for the account of the depositary receipt holder(s). As holder of the depositary receipts, you remain economically entitled to the assets.
You may make up the first board of the STAK yourself. Next, by appointing a successor board, the continuity of your company can be safeguarded if an unforeseen situation arises that (temporarily) prevents you from acting.
Want to know more?
Would you like more information about the living will and/or the depositary receipts for shares and the establishment of a STAK? If so, please contact Michelle Seijsener by e-mail or by phone +31 (0)88 277 10 14 or Bianca de Kroon by e-mail or by phone +31 (0)88 277 10 10. They will be happy to help.