Updated on 28 September 2026.
The bank wants additional security, a major customer has not paid and the next payroll is approaching. As a director, you must keep making decisions while the margin for error narrows. When is continued trading justified? Which creditors can you pay? What information should you record now to explain your conduct later?
This directors’ liability checklist helps directors of a Dutch BV organise the principal legal questions. It is no guarantee against liability. The assessment depends on the circumstances and the information available when decisions were made. That is precisely why timely insight and demonstrable consideration matter.
1. Do you know what the business can pay in the coming weeks?
Prepare a current cash-flow forecast covering expected receipts, necessary expenditure and financing headroom. Separate firm commitments from expectations. A potential investor is not an available credit facility. Calculate the consequences of a debtor paying late or financing negotiations failing.
Discuss the forecast at board level and update it as often as circumstances require. Record the decisive assumptions and when continued trading will next be reviewed. Positive equity in the annual accounts does not establish the ability to meet debts as they fall due. Our article on annual accounts in insolvency explains the distinction.
2. Can you still responsibly incur new obligations?
A director may face personal exposure when incurring obligations for the company while knowing, or reasonably being expected to understand, that it cannot perform and will offer no recourse. In Ontvanger/Roelofsen, the Supreme Court described important categories of directors’ liability to third parties and the required personal culpability.
A setback does not prohibit every new order. Examine the specific ability to pay, the obligation’s purpose and the consequences for the other party. Take care with assurances about financing or payment. An inaccurate reassurance may later form a significant part of a claim.
3. Can you justify your choice of whom to pay?
There is no general rule requiring a business in financial difficulties always to pay every creditor proportionately. Paying an essential supplier may preserve value. The circumstances change, however, when continued trading no longer offers realistic prospects or related parties receive preferential treatment.
In a judgment of 12 April 2019, in the context of directors’ tax liability, the Supreme Court discussed discretion over payments and the particular position of payments to related parties when winding down operations. Record commercial reasons and exercise particular care with payments to yourself, shareholders and group companies. Selectivity is neither automatically prohibited nor unrestricted.
4. Are accounting records and publication up to date?
Check that the records provide sufficient insight into rights and obligations and that annual accounts were published on time. In insolvency, Article 2:248 of the Dutch Civil Code attaches significant evidential consequences to breaches of accounting and publication duties, except insignificant omissions.
Retain underlying documents and ensure that the board has access even if employees or service providers become unavailable. Appointing an accountant does not transfer the board’s responsibilities. Our article on the board’s annual accounts obligations addresses practical systems, deadlines and division of responsibilities.
5. Must inability to pay be notified?
Specific notification rules apply to certain taxes and contributions. The Dutch Tax Administration generally specifies two weeks after payment should have been made for taxes paid on a return. Additional conditions apply to supplementary assessments. Where sectoral pension fund membership is compulsory, the position towards that fund must also be examined.
A request for deferred payment is not the same as an inability-to-pay notification. Check the applicable rules, completeness, dispatch and receipt. Do not wait for the annual accounts or certainty about rescue financing. A missed notification can seriously worsen a director’s personal evidential position.
6. Are dividends and other distributions still justified?
For BV distributions, Article 2:216 of the Dutch Civil Code requires, among other things, assessment of equity against mandatory reserves and board approval. The board must refuse approval if it knows or should reasonably foresee that the company will subsequently be unable to continue paying its debts as they fall due.
Look beyond current bank balances. Include foreseeable obligations, uncertainties and financing conditions. A shareholders’ resolution does not remove the board’s own assessment. Repayment of shareholder loans or asset transfers may also present legal risks, although not necessarily under precisely the same rules as dividends.
7. Have conflicts of interest and group decisions been handled carefully?
The group’s interest does not always coincide with that of every company. Identify which company provides security, assumes a debt or lends money, and what it receives in return. Document terms and alternatives.
Apply conflict-of-interest rules and ensure that decisions are taken by the authorised body. In a deadlock, inaction may itself cause harm. Our article on 50/50 shareholder deadlock discusses possible next steps. Internal board conflict does not release anyone from identifying urgent risks and considering appropriate measures.
8. Have pre-incorporation transactions been assessed properly?
A young company is not subject to a generally stricter liability rule merely because of its age. However, Article 2:203 of the Dutch Civil Code contains specific rules for acting on behalf of a BV in formation and subsequent ratification. Knowledge of inability to perform may be relevant.
The statutory presumption where insolvency follows within a year of incorporation belongs to that specific regime. It is not a general rule making directors of every BV under a year old more readily liable for all debts. Check the particular transaction, on whose behalf it was entered into and when.
9. Have you compared recovery, restructuring and closure?
Consider cost reductions, additional finance, creditor arrangements and possible restructuring in good time. A WHOA restructuring may be an option subject to conditions, but requires preparation, funding and an appropriate outlook. An informal arrangement or sale may fit another situation better.
Also record when continued trading would cease to be justified. Check statutory and constitutional authority for a voluntary insolvency application. Consider employment consequences and security interests. Our insolvency and restructuring practice brings these issues together.
10. Can you explain your decisions afterwards?
Our detailed discussion of dividends and liability addresses the distribution test and recipients’ position. If your bank threatens to terminate financing, read about termination of business credit and possible responses.
Retain forecasts, advice, correspondence and board decisions in the versions available at the time. Record the uncertainties recognised and the action taken. Have significant decisions reviewed before they become irreversible. Sascha Lang advises directors on acting during financial distress and defending liability claims.
