# An informal group practice contradicts the articles while insolvency is already in sight
You have two effective choices once an informal group practice departs from what the articles of association actually authorise and insolvency is already near for one or more group entities: formalise the practice now, or unwind it now. Doing nothing is not a neutral third option. It converts a governance irregularity into a liability question the day a curator or a disappointed shareholder looks back at the record. Which route fits depends on how much detriment the practice has already caused and how many entities in the group it touches.
What happens if you do nothing
If the current informal practice continues unaltered, the record of who decided what, and on what authority, keeps diverging from what the articles say the decision-making body actually is. That gap is invisible while every entity in the group remains solvent. It stops being invisible once a curator is appointed to any entity in the group: under the applicable Dutch rules, a curator reviews the board's conduct in the run-up to insolvency, and an undocumented departure from the articles is read as evidence, not as an administrative footnote. This is a matter of corporate law and governance in a Dutch group, not merely of bookkeeping, and it does not resolve itself while you wait.
The routes
| Route | What it takes | Time | Cost driver | What it gives you |
|---|---|---|---|---|
| Formalise now | A shareholders' resolution ratifying the practice, or an amendment to the articles if the practice is to continue | Weeks, faster where shareholders are already aligned | Notarial involvement if the articles are amended; otherwise limited to advisory time | A governance record that matches actual conduct, narrowing the gap a curator can point to |
| Unwind now | Reversing the informal decisions and reverting to the procedure the articles set out | Depends on how many transactions must be traced and reversed | The volume of intercompany positions affected, entity by entity | A clean position, at the cost of undoing whatever the informal practice achieved |
| Do nothing | No action; the practice continues as it has been running | No time spent now; exposure accrues in the background | Nothing today; the cost shifts entirely to the moment of challenge | Short-term convenience, at the price of an unmanaged liability question later |
What decides between them
Whether shareholders have already accepted the practice informally matters, but only between shareholders and the company: it does little to bind a curator acting on behalf of creditors. How many entities in the group the practice touches matters more; a practice confined to one dormant subsidiary carries different weight than one running through the group's main trading entity in the Netherlands. Whether the practice caused actual financial detriment, rather than only a procedural gap, decides how urgently it must be addressed. If a Dutch court is later asked to test whether the board acted reasonably, it looks at the group's actual financial position at the time each decision was taken, not at how the decision was later described. How liability for governance failures is tested once it is raised, including how liability for late filing is reviewed and appealed, is addressed separately from this page.
The deadline that runs
There is no single statutory filing deadline attached to this situation on its own. The deadline that matters is the moment the board knew, or ought reasonably to have known, that continuing the current course was no longer justified. Under the applicable Dutch rules, that moment is the test applied afterwards to the board's conduct, and it runs from well before any formal insolvency filing, not from it. Acting before that moment is reached is a materially different position from acting after it has already passed, even where the outward steps taken look identical.
Evidence to secure now
- Board minutes and any informal correspondence recording who actually authorised the practice, and on whose instruction
- The last several sets of financial statements for every entity involved, showing the trend rather than only the current position
- Intercompany agreements and any guarantee or funding arrangements affected by the practice
- Evidence that shareholders knew of, and accepted, the practice, even where that acceptance was never formalised in a resolution
- Correspondence with the auditor or accountant touching on the entities' financial position over the same period
A related pattern arises where the annual accounts were filed late and someone has already noticed, since the same evidence trail is usually relevant to both questions.
Cost drivers
The cost of resolving this is driven by volume, not by the underlying legal question. What drives the total is how many entities in the group are touched, how many intercompany transactions must be reviewed or reversed, and whether the articles need a notarial amendment or only a shareholders' resolution. Reconstructing an informal history of decisions is usually the largest single driver of time spent. No public figure exists for that time, because it depends entirely on how well the group's own records were kept before this point.
What we would do in the first week
Freeze any further informal decisions until the position is mapped across the group. Establish, entity by entity, which are near insolvency and which are not; a group entity that is instead already dissolved without liquidation sits outside this page entirely and needs a different route. Identify who in fact authorised the practice and compare that against what the articles actually require. Take the formalise-or-unwind decision only once that map exists, because the correct route can differ by entity within the same group. Where the group includes a non-Dutch entity, the equivalent register position, such as a directors-and-officers extract for the Irish entity, is checked at the same time.
What this does not cover
- Whether the specific transactions carried out under the informal practice are themselves voidable
- The substantive test for director liability once insolvency has actually occurred
- A group where a foreign parent's own law also governs the practice in question
- Works council or employee consultation obligations that may run alongside this
Questions
Can shareholders retroactively approve a practice that contradicted the articles before insolvency became visible?
Retroactive approval can settle the relationship between shareholders and the company, but it does not bind a curator acting for creditors once insolvency occurs. Under the applicable Dutch rules, the test applied to the board's conduct looks at what was reasonable given the company's actual financial position at the time, not at what shareholders later ratified.
Does formalising the practice now protect the directors who authorised it informally?
Formalising the practice closes the gap between the record and the conduct going forward, but it does not erase what happened before formalisation. A curator can still examine decisions taken earlier, particularly where insolvency was already foreseeable when those decisions were made.
Does the answer differ between a wholly owned subsidiary and one with a minority shareholder?
Yes. A minority shareholder can challenge a governance departure from the articles directly, independently of any insolvency question, which can include an application to the Enterprise Chamber. A wholly owned subsidiary usually faces that scrutiny only through the curator, and only once insolvency has actually occurred.
Written by Eva Kuipers, who works on governance and Enterprise Chamber matters within the firm's corporate practice. This page assumes the group is structured under Dutch law and does not address a foreign parent's own governance regime.
Where the articles themselves need to be revisited to keep pace with how the group actually operates, that sits with the firm's shareholders' agreements service. A structure report sets out the current register position for every entity in the group before you decide which route to take. Where you need this mapped against your own group's articles and current financial position, route it through a note rather than acting on the summary above.
Last legal review: 2026-10-08