responsibilities of the different bodies
within a BV or NV will be discussed.
the company. For that reason all major
decisions regarding the NV have to be
taken or approved by the general meeting
of shareholders (hereinafter: general
meeting). Major decisions include, for
example: amendments to the articles
of association or issuing new shares.
Shareholders have the right to vote in
the general meeting. If they own at least
1 percent of the shares, they have the
right to put items on the agenda of the
general meeting. Other important rights
of the general meeting include approving
or dismissing of the company's financial
statements and having the power to
appoint and dismiss directors of the
management board.
The articles of a BV may stipulate
that a body of the company (for instance,
the general meeting of shareholders)
has the power to bindingly instruct the
management board. However, if the
aforementioned instruction conflicts with
the interests of the BV, the management
board may decide otherwise.
management board of both BV and
NV are: the proper management of the
company and the timely and accurate
drawing up of its financial statements.
The management board is in charge
of determining the strategy and the
(external) representation of the company.
In this capacity, the management
board and its individual members are
authorized to bind the company. To
what extent they are collectively or
individually authorized to do so is often
specified in the articles of association.
Therefore, it is recommended to
verify, prior to a transaction, whether a
particular member is actually authorized
to bind the company.
has a conflict of interest with respect to
a certain transaction, he or she is not
allowed to participate in the decision-
making process. In case the entire
management board has a conflict of
interest, the decision has to be taken by
the general meeting, or, if existing, by the
supervisory board or the non-executive
directors, unless otherwise stipulated in
the articles of association.
two-tier management system wherein
supervisory directors take seat in a
separate body, the supervisory board.
Although BVs and NVs are only obliged
in specific cases (i.e. when the BV or
NV qualifies as a structuurvennootschap)
to install a supervisory board, many
entities do (voluntarily) have one. The
supervisory board oversees and advises
the management board independently
and actively. The supervisory board is
usually appointed by the general meeting
of shareholders. Nowadays, a BV or NV
can also opt for a "one-tier board model"
consisting of only one board (thus no
supervisory board) with both executive
and non-executive directors.
employees is obliged to establish a works
council. The employees can participate
in the decision-making process of the
company through this works council.
According to the law it has, depending
on the subject at issue, the following
rights: 1. the right to render advice, 2.
the right of approval, and, 3. the right of
information, consultation and initiative.
disclose their financial statements
(jaarrekening). The financial statements
of big and medium-sized companies
are presented to the shareholders in
an annual report (jaarverslag). Small
companies only have to present their
financial statements; they are not obliged
to draw up an annual report.
shareholders are only liable for their
share in the company. The managing
directors are in principle not liable for
debts of the company. They will only
be liable if serious negligence by the
managing directors has been proven.
Then, directors may be held jointly
and severally liable for the damage the
company suffers. In case of bankruptcy,
this may also apply to the damage the
creditors of the company suffer.
a branch office in the Netherlands
without having to incorporate a Dutch
legal entity. Or they can enter the Dutch
market by appointing a distributor, an
agent or a franchisee.
Netherlands, it is important to know
that there are many legal provisions
that protect employees both Dutch and
foreign. Employees are also protected if
the company they work for is transferred
to another country.
Moreover, a foreign entrepreneur
might want to lease business
accommodation in the Netherlands.
Generally, the lease period is five years
with an option to renew the lease for
another term of five years. As this is
a complex matter, it is not possible
to provide all the specific legal lease
pitfalls within the scope of this article.
be far-reaching, the Netherlands is an
appealing place to conduct business,
particularly with a qualified lawyer
steering you through the rules and
regulations of Dutch law.