Is it possible to appeal to psychological force majeure when not filing annual accounts?
The Amsterdam Court of Appeal heard a remarkable case on October 19, 2016. It concerns the failure to file annual accounts or the failure to file them on time. This article briefly addresses this topic. Many entrepreneurs are aware that private limited companies (BVs) and public limited companies (NVs) are required to publish their annual accounts. For private limited companies (BVs), the annual accounts must be filed no later than thirteen months after the financial year. This is done with the Chamber of Commerce. In my practice, this filing obligation usually arises in the context of potential directors’ liability .
Suspicion of improper management
Article 2:248, paragraph 2, of the Dutch Civil Code stipulates that failure to file annual accounts on time may give rise to the suspicion of “improper management.” This applies in bankruptcy situations. If a director fails to file the annual accounts (on time), the bankruptcy is presumed to be attributable to the director. This can have significant consequences for directors, as they may be personally liable for the bankruptcy debts.
Failure to file annual accounts is also an economic crime
What is less well-known, or at least underexposed, is the fact that failing to file annual accounts is also an economic offense. Under Article 1, paragraph 4, of the Economic Offences Act, failing to file annual accounts on time is a violation. This violation is punishable by a fine, community service, or imprisonment.
Is the appeal based on psychological duress valid?
The aforementioned judgment of October 19th also concerned a company that had failed to file its annual accounts (on time). However, the director defended himself by invoking “mental force majeure.” Specifically, he allegedly did not file the annual accounts. He considered the risk of criminals misusing the filed data too great.
Court of Appeal ruling
Although creative, the court of appeal (as expected) rejected this defense. The director had previously stated to a police officer that he “hadn’t had time to file the documents.” Furthermore, the court briefly addressed the alleged “fear of abuse.” The court explained that using a private limited company (BV) inherently entails the obligation to provide insight into the financial position. This obligation also applies to the director in question. The fear of abuse is not considered a valid reason to deviate from this obligation. This ultimately resulted in the company receiving a fine of €900.00, of which €300.00 was conditional.
Non-binding advice?
RechtNet Advocaten can advise you on the risks (or possibilities) of directors’ liability. In addition, one of our criminal defense lawyers can assist you if you encounter a violation of the Economic Offences Act (Wet op de Economische Delicten) in connection with the failure to file annual accounts. For a free consultation, please contact us directly at 073 – 615 43 11 or email info@rechtnet.nl.
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