Why amend the articles of association?

The deed of incorporation of a legal entity lays down the initial articles of association. The articles of association can be considered the foundation of the legal entity. The law specifies a number of subjects that must be included in the articles of association. These include the name, seat, and objectives of the legal entity. In addition to these mandatory subjects, the articles of association may also regulate other matters that determine the structure, organization, and identity of the legal entity.

Amending the articles of association can have various reasons; for example, over time, the articles of association may no longer align with the activities of the legal entity, the name may need to be changed, or the articles of association may have become (severely) outdated and therefore no longer align with the current organization.

How do you amend the articles of incorporation?

A change to the articles of association must always be recorded in a notarial deed. Depending on the desired changes, the articles of association may be amended in whole or in part. In addition, for the various legal entities, there are different types of decision-making procedures that must underlie the amendment of the articles of association. We naturally pay attention to this at all times. If desired, we will prepare the necessary documents for you.

Amending the Articles of Association of a Capital Company (Private Limited Company/Public Limited Company)

A resolution to amend the articles of association of a capital company (a private limited company or a public limited company) is passed by the general meeting of shareholders. Only the general meeting of shareholders has this authority within a capital company. To do this, a meeting does not always need to be convened; the law also offers the possibility to pass resolutions outside of a meeting. A resolution to amend the articles of association can be passed outside of a meeting if all shareholders have cast their vote in writing.

Unless the articles of association prescribe a larger majority, the resolution to amend the articles of association can be adopted by an absolute majority (50%+1). After the shareholders have adopted the resolution to amend the articles of association, the deed of amendment of the articles of association can be signed by the company's board of directors or by an authorized person.

Capital reduction BV

In addition to the reasons mentioned above, a capital reduction is a significant reason for a joint-stock company to amend its articles of association. One of the possible ways to reduce capital is by lowering the nominal value of the shares. This requires an amendment of the articles of association. The released amount must be repaid to the shareholders.

The private limited company can decide to reduce its issued capital; this decision is subject to the legal and statutory rules concerning amendments to the articles of association. Because a capital reduction often occurs within so-called ‘one-person companies’, a meeting is usually not convened, but rather a shareholder resolution will be adopted outside of a meeting.

Furthermore, the private limited company must obtain prior approval from the general meeting of shareholders for a proposed capital reduction; it must assess whether the company can continue to pay its (future) debts after the repayment.

Amendments to statutes of an association and foundation

For amending the articles of association of an association, a resolution of the general meeting is also required; this time of the general members' meeting. When convening the general members' meeting, it must be stated that a proposal for amending the articles of association will be made. In addition, the literal text of the amendment proposal must be made available for inspection by the members. Unless the articles of association stipulate otherwise, a resolution to amend the articles of association is passed by at least 2/3 of the votes. After the relevant resolution has been passed, the deed of amendment of the articles of association can be signed by an authorized person or the board. You can read about the complete procedure for amending the articles of association of an association in our blog: Statute amendment for an association: what to look out for?

The statutes of a foundation can only be amended if the statutes explicitly provide for this. This is because a foundation does not have a general meeting that can decide on this. If an amendment to the statutes is possible, the statutes will designate the body authorized to decide on the amendment. The body authorized to make the decision to amend the statutes (usually the board) will often also be authorized by the statutes to sign the deed.

Amend bylaws with a power of attorney

Since it is the general meeting that decides on the amendment of the articles of association, they can, in their decision-making, designate the person who may sign the deed. This can be a director of the legal entity or an employee of our notary's office. The signing then takes place via a power of attorney.

Update shareholders' register and notification of changes to the trade register

After signing the deed, the amendment to the articles of association and any registrable changes (such as changes to the name, registered office, and capital) must be entered in the shareholders' register. In addition, it is mandatory to declare the amendment to the articles of association and deposit a copy thereof with the Chamber of Commerce. We will take care of both for you. Due to our electronic connection with the Chamber of Commerce, the amendment to the articles of association is usually visible in the Trade Register within three hours.