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Reinier W.L. Russell, LL.M.
Russell Advocaten B.V.
Amsterdam, Netherlands

What is a shareholders’ agreement? What can be governed by a shareholders’ agreement? And why do you need a shareholders’ agreement if the company also has articles of association?

Do you intend to start a company together with one or more shareholders? In that case, it is recommended to make the mutual agreements and lay them down in a shareholders’ agreement. What can be dealt with in this agreement? And why can these things not just be governed by the articles of association?

Articles of association vs shareholders agreement

Articles of association

When an NV or BV is set up, the mutual relations within the organisation are laid down in writing by a notary. The articles of association are the basic rules of the legal person.

For instance, they govern the aim of the company, the way of the appointment and dismissal of directors, and the way in which to convene the general meeting of shareholders, who is to represent the company, and what are the rules regarding issue of shares.

Shareholders agreement

The shareholders agreement deals with the cooperation of shareholders in detail. This agreement contains specific agreements regarding the day-to-day business of the shareholders.

A shareholders’ agreement may contain agreements on, for instance:

  • The division of tasks between the parties involved
  • The distribution of dividend
  • The funding of the company
  • The appointment of (future) directors
  • The obligation to vote on certain topics;
  • The involvement of the parties in competitive activities (a “non-compete clause”) and
  • The transfer and/or sale of shares (for instance, a tag-along and/or drag-along provision)

Why not just include it in the articles of association?

Since the introduction of the Dutch flex-BV, many things can be dealt with in the articles of association. So why not lay down all agreements in the articles of association? Why conclude a shareholders’ agreement as well? There are two reasons:

  • The arrangements made in the shareholders’ agreement are not public, and
  • The arrangements made in the shareholders’ agreement can be amended more easily.

Public nature of agreements 

The contents of a shareholders’ agreement don’t need to be published, but the contents of the articles of association do. The articles of association must be filed with the Trade Register of the Chamber of Commerce and can be requested by any interested party.

Matters you do not wish to expose, such as financial agreements, should therefore be laid down in the shareholders’ agreement.

Amending articles of association

Before the agreements included in the articles of association can be changed, a shareholders’ resolution must be adopted. To do so, a general meeting of shareholders must be convened. In addition, the entrepreneur must ask the advice of the works council on the resolution on amending the articles of association.

Once the resolution has been adopted, the company will have to go to a notary, as the amendment of the articles of association is executed on the basis of a notarial deed.

Amending a shareholders’ agreement

To amend the arrangements established in the shareholders’ agreement, all persons that are party to the agreement must agree with it (not necessarily all shareholders of the company). Thus, the works council’s advice is not required and no notary is needed for the amendment. However, it is recommended to gain legal advice beforehand so that you will actually establish what you had in mind.

What can we do? 

Would you like to make arrangements and lay them down in a shareholders’ agreement? Are you wondering what can be arranged? We will gladly help you making and establishing the necessary arrangemen