Turbo liquidation – a little less turbo?

Turbo liquidation – a little less turbo?

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Turbo-liquidation is the quickest and simplest dissolution procedure in the Dutch legal system. This form of dissolution offers the possibility of dissolving a legal person within one week and de-registering it from the Trade Register. Because it is not necessary to go through long-term formal procedures, turbo liquidation offers many advantages for the legal person to be dissolved. However, the simplicity of turbo liquidation does not only entail positive consequences. There is a chance that creditors will miss out on their claims due to the abrupt dissolution of a legal person, and then not get the chance to examine whether there was any possibility for the legal person of settling their claim. Sander Dekker, Minister for Legal Protection, has addressed this problem and announced a bill.

As indicated above, the Dutch legal system has several options for dissolving a legal person, namely;

  • by means of a shareholders’ resolution to dissolve:
  • because the articles of association of the legal person contain a resolutive condition or:
  • dissolution by the court.

Turbo liquidation proceeds via the first option for dissolution. The dissolution process can be started via the General Meeting of Shareholders of the legal person with it passing a dissolution resolution. After this resolution has been made, only a notification of dissolution has to be made at the Chamber of Commerce (KvK) and with that dissolution is, so to speak, complete. A very simple and quick form of dissolution.

The condition for applying turbo liquidation is that it is an ’empty’ or inactive legal person. This means that there must be no income and/or expense in the legal person at the time of turbo liquidation. This condition is not always complied with and this entails the aforementioned risk for creditors. To limit the risks for creditors, the Minister for Legal Protection announced a bill on 7 October 2019. From now on, dissolution must be published and a final balance must be drawn up and filed with the Chamber of Commerce. The new arrangement must enable creditors to assess whether there are indeed no more assets left in the company.

The bill will be submitted in 2020, but it is not known when and whether this law will be implemented. This means that turbo liquidation may lose some of its simplicity, but despite the fact that the dissolution procedure is being extended, turbo liquidation will certainly remain the fastest and easiest way of dissolution.

If you want more information about the dissolution of legal persons, feel free to contact us.


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