Transfer of shares - in a company in the Netherlands

How do you transfer shares in a company under Dutch law?

Shares can only be issued by companies with corporate legal personality whose capital can be divided into shares. Hence, under Dutch law it only applies to private limited companies (BV or Besloten Vennootschap) and public limited companies (NV or Naamloze Vennootschap).

How are shares transferred in the Netherlands?

The transfer of shares in the Netherlands is relatively straightforward subject to restrictions included in the articles of association of the respective company.

Registered shares are transferred at a Dutch civil notary and a record of transfers is kept at the shareholders register.

There are two types of shares in the Netherlands, which can be divided further into subcategories. Not all types of shares are available to both legal forms as we shall see.

Registered shares in the Netherlands

Registered shares, in the Netherlands, are available to both private limited (BV) and public limited (NV) companies. Registered shares are transferred by a notarial deed before a Dutch civil notary, it is essential that one observes the articles of association beforehand, as it may contain certain limitations to the transfer of these shares. For instance, a lock up clause, if invoked, prevents any transfer of shares for a certain period of time.

There are four subcategories of registered shares:

1. Ordinary shares, the shareholders of which, have voting rights but no special right. Ordinary shares can be divided into classes by the articles of association, the higher the class the more rights are awarded.
2. Priority shares, the shareholders of which, receive certain extra controlling rights by the articles of association.
3. Preference shares, the shareholders of which, are entitled to receive a fixed dividend that has preference over any dividend. The shares often do not provide any voting rights.
4. Share certificates apply only to public limited (NV) companies. Shareholders of share certificates are typically only interested in the profits.

Bearer shares in the Netherlands

Bearer shares, in the Netherlands, are shares only available to public limited (NV) companies.

Unlike registered shares, bearer shares are not registered and are therefore transferable upon the delivery of the attached share certificates.