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Liability of shareholders - in the Netherlands

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  • Liability of shareholders in the Netherlands

What is the liability of shareholders - under Dutch law?

Liability of shareholders in the Netherlands

In the Netherlands, from a legal perspective, entities such as companies (‘BV’ or ‘NV’) are seen by law as single, indivisible persons. After all, they enjoy their own rights and obligations, may enforce these rights and possess their own capital. However, it is impossible for them to act without a natural person, these natural persons act on behalf of the company. The company in turn can be held liable for these actions and in some cases, these natural persons such as shareholders, are also held liable. In the Netherlands, under some circumstance shareholders are held liable. There are five sources which impose obligations upon shareholder, if such an obligation is not complied with then the shareholder, in principle, can be held liable.


Shareholder assumes role of a director and shareholder liability in the Netherlands

In the Netherlands, shareholders are permitted some influence over the respective company. Such influences have to be foreseen by the articles of incorporation. If so, the directors have to follow the instructions made by the shareholders. The extent of these instructions are limited. They must be very general in nature and not contrary to the interests of the company. If a shareholder no longer merely provides general instructions but substantially involves himself with the internal decision making of the company and the executive board, the shareholder will be deemed a director. Therefore, the shareholder may be held liable as a director as well. For more information about director’s liability visit our page about director’s liability in the Netherlands.


Unlawful act and shareholder liability in the Netherlands

Shareholders, just like anyone else, need to act in accordance with the law. If they fail to do so, their act is deemed unlawful and in turn they are held liable for their act. Such acts may include for instance the selling of shares knowing that the buyer of the shares cannot comply with their part of the agreement or expending profit whilst aware that the company, as a result, can no longer pay its creditors.


Articles of incorporation and shareholder liability in the Netherlands

The articles of incorporation may specify certain obligations. These obligations may amount to requirement for becoming a shareholder, circumstances in which shareholders are required to make arrangement for the transfer of their shares and obligations to third parties. These obligations only apply if the shareholder has consented to these obligations. If so, the shareholder can be held liable for the debts that come as a result.


Shareholders' agreement and shareholder liability in the Netherlands

The shareholder agreement, which applies only to the shareholders and is concluded amongst them, may foresee some obligations. If such an obligation is not complied with, that respective shareholder may be held liable for the damage resulting from the non-compliance.


Obligations in the Civil Code and shareholder liability in the Netherlands

The Dutch Civil Code stipulates that shareholders are under the obligation to make payment to the company for the shares they acquire. If the shareholder fails to do so, he will be held liable. Certain arrangement can be made which deviate from the conventional scenario where shares are paid for in full at the time of transfer.


Starting a business in Holland

Dutch company law
Setting up a business Company formation Company name search Registration of a company Shareholder in the Netherlands Transfer of shares Management board Supervisory board Shareholders' meeting Piercing the corporate veil Liability of directors Liability of shareholders Inquiry proceedings
Employment law in the Netherlands
Duration of employment Probation period Non-competition clauses Sick pay in the Netherlands Business reorganization Works council in the Netherlands
Commercial contracts under Dutch law
Agency contracts Termination of agency Goodwill compensation Franchising in the Netherlands
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Other resources
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  • Netherlands Commercial Court; commercial dispute resolution in the Netherlands.
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