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Shareholder of a company - in the Netherlands

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  • Shareholder of a company in the Netherlands

What does being a shareholder of a company in the Netherlands entail?

Shareholder of a company in the Netherlands

The role played by shareholders is important in the creation, progression and sustainability of a company. This role includes certain obligations but also provides legal rights and interests.


Shareholder power in the Netherlands

The scope of shareholder power under corporate law in the Netherlands has difficulty finding some semblance of balance in corporate governance and it often depends on the size of the company itself. In the division of power in a company, shareholders retain some level of influence, but they cannot invoke higher authority than the board.

For most legal forms of a company, the usual case is that there is more than one active shareholder. As a result, consideration should be given to the relationships shareholders maintain with each other and with other actors in the corporate machine.


Shareholders’ agreement under Dutch law

Shareholders generally move within a corporate structure with some degree of unity, this is codified in the Articles of Association but more specifically is usually covered under a shareholders’ agreement. This agreement needs to be tailored to the shareholders in each company and as such, is dependent on the unique circumstances of each company’s corporate aim. The agreement usually reflects their wishes on certain engagements in the company and gives effect to, or blocks, certain actions among shareholders themselves. In essence, it contains pre-emptive rights which give instructions for the operation of the company. This can include:

  1. The sale of shares in the company
  2. The price of these shares
  3. Capital contribution
  4. Voting rights
  5. The appointment of Managing and Supervisory Directors

Conflicts with these rights are intended to be resolved through the shareholder agreement itself. For example, a difference of opinion that occurs between minority and majority shareholders on the sale of shares, is likely resolved through provisions known as drag-along and tag-along clauses. The former imposing the obligation to sell on the minority shareholders and the latter allowing the minority shareholder to co-sell his shares at the same time as the majority shareholder.

Shareholder disputes often hinge on the wording of the shareholder agreement. As a result, it is imperative for the agreement to be drafted by a skilled lawyer.


Requirements of a Shareholder under Dutch law

In the Netherlands the obligations of shareholders depend on the nature of the company in which they have acquired shares. The general obligation in both an NV and a BV, is that the shareholder is required to pay in the nominal value of a share. In an NV, mandatory shareholder obligations do not extend much beyond this. With a BV, further obligations may be imposed on all shareholders or a certain category of shareholders, towards the company or those engaged with it, through the Articles of Association. This can even extend to the transfer and disposal of their shares, but the shareholder’s consent is required prior to imposing obligations of this nature.

The shareholder is also subject to the overarching principle of Good Faith. They must ensure that their actions are both reasonable and equitable in all matters connected with the corporation. However, shareholders are not subject to upholding the entire corporate interest, this responsibility is left to the board of the company.

Shareholders must also convene a shareholder meeting which should be held once a year. Additional meetings may be held, which will likely be classed as ‘special’ meetings.


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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