Does a BV fall under the deposit guarantee scheme? This question was asked by a trading company after it was confronted with the bankruptcy of its bank.
The Deposit Guarantee Scheme of the Dutch Central Bank is a scheme that guarantees certain bank balances of account holders if a bank goes bankrupt.
The deposit guarantee scheme guarantees an amount of € 100,000 per account holder per bank, regardless of the number of accounts the account holder has. You cannot invoke the deposit guarantee scheme for the amount in excess of € 100,000 per bank.
Virtually all current and savings accounts, current accounts and fixed-term deposits are covered by the Deposit Guarantee Scheme. Shares are not covered and bonds are usually not covered either.
Who can call on the Deposit Guarantee Scheme?
Private individuals and small businesses can rely on the deposit guarantee scheme. Small businesses are enterprises which are permitted to publish an abridged balance sheet.
If the account is held in the name of two (or more) persons jointly (a joint account), each of them will be eligible for cover under the Deposit Guarantee Scheme provided that all the conditions have been satisfied. The cover for a joint account will apply on a pro rata basis, i.e. for two account holders, each for half, unless demonstrably otherwise arranged. If the balance of the joint account is € 200,000, both account holders are in principle entitled to € 100,000 each. But beware, if an account holder has one or more other accounts, the maximum applies to all balances together.
More information can be found on the website of De Nederlandsche Bank www.dnb.nl.
BV and small enterprises
Small businesses can also rely on the deposit guarantee scheme. Small undertakings are undertakings which are permitted to publish an abridged balance sheet. A company may publish an abridged balance sheet if it meets two of the following three criteria:
- a balance sheet total of € 4.4 million or less,
- a net turnover of € 8.8 million or less,
- an average number of employees of 50 or less during the financial year.
However, this arrangement does not apply to financial companies/institutions.
There is now some clarity as to whether a Holding BV falls within the scope of the financial institutions. The regulation concerning the deposit guarantee scheme falls under the legislation concerning the Financial Supervision Act. (Art 1:1 Wft). This only applies to companies that are required to have a licence under the WFT by De Nederlandse Bank (DNB) or the Netherlands Authority for the Financial Markets (AFM). By far the most Holding-BV's are not covered.