MANDATORY AND NON-MANDATORY RULES IN DUTCH CORPORATE LAW Martha Meine IIIA I Introduction Dutch corporate law has gra dually expanded during the last three decades. Due to national and European government action it has increasingly become more detailed and complex. A large part of the law is considered to be mandatory. The am of this paper is to clarify the scope of manda tory corporate bw by exam ining the limits it places on modifications in by-laws and agreements between shareholders There is a certain tension between the amount of mandatory corporate law and the freedom of the individual guaranteed by private law. On the one hand, the freedom of the indiv idual to contract and set up organizations is limited by mandatory corporate aw. From the opposite point of view, it is mandatory corporate law which is limited by private law. In that respect, the mandatory effect of corporate law is lessened if shareholder agreements are allowed to circumvent corporate hw On the other hand, mandatory corporate w may be used to ensure the freedom of the individual First, a brief introduction of the main features of Dutch corporate law will be given, followed by more general remarks on the im pact of statutory rules and the possibilities of self-regulation by the shareholders. Finally, a number of statutory rules will be scrutinized more closely to establish their mandatory effect in practice Different models of corporations Dutch aw offers various legal forms to individuals conducting business activ ities. A distinction is made between partnerships and corporations. Only corporations have legal personality. The civil partnership(maatschap)is a contract to co-operate between members of an independent profession. The general partnership (vennootschap onder firma) and the limited partnership(commanditaire vennoot schap)are specal kinds of civil partnerships, which apply if a business is conducted Each mem ber of a general partnership has the authority to act on behalf of the partnership. Moreover, the partners in a general partnership and the executive rtners in a lim ited partnership are jointly and severally liable as distinct to the liability for equal parts of the members of a civil partnership. The silent or lim ited partners of a limited partnership, however, are not obliged to pay up more than their contribution, as long as they do not act on behalf of the lim ited partnership Individuals who want to set up a corporation, can opt for a public limited mpany(naamloze vennootschap, hereafter NV) or a private limited com pany esloten vennootschap, hereafter BV). Most statutory rules apply ing to NVs and BVs are identical. The main differences are firstly, that a bv has to have a minimu capital of at least 18.000 euro, as opposed to 50.000 euro for an NV and secondly University of Maastricht The Netherlands. The author wants to thank dr. Jose blanco Fernandezandprof. dr Harm-Jan de Kluver for ther critical remarks and kind support. mently, a partnershp law reform s beng proposed, creating a single form partnership with an optional legal personality
MANDATORY AND NON-MANDATORY RULES IN DUTCH CORPORATE LAW Martha Meinema* III A 1 1 Introduction Dutch corporate law has gradually expanded during the last three decades. Due to national and European government action it has increasingly become more detailed and complex. A large part of the law is considered to be mandatory. The aim of this paper is to clarify the scope of mandatory corporate law by examining the limits it places on modifications in by-laws and agreements between shareholders. There is a certain tension between the amount of mandatory corporate law and the freedom of the individual guaranteed by private law. On the one hand, the freedom of the individual to contract and set up organizations is limited by mandatory corporate law. From the opposite point of view, it is mandatory corporate law which is limited by private law. In that respect, the mandatory effect of corporate law is lessened if shareholder agreements are allowed to circumvent corporate law. On the other hand, mandatory corporate law may be used to ensure the freedom of the individual. First, a brief introduction of the main features of Dutch corporate law will be given, followed by more general remarks on the impact of statutory rules and the possibilities of self-regulation by the shareholders. Finally, a number of statutory rules will be scrutinized more closely to establish their mandatory effect in practice. 2 Different models of corporations Dutch law offers various legal forms to individuals conducting business activities. A distinction is made between partnerships and corporations. Only corporations have legal personality. The civil partnership (maatschap) is a contract to co-operate between members of an independent profession. The general partnership (vennootschap onder firma) and the limited partnership (commanditaire vennootschap) are special kinds of civil partnerships, which apply if a business is conducted. Each member of a general partnership has the authority to act on behalf of the partnership. Moreover, the partners in a general partnership and the executive partners in a limited partnership are jointly and severally liable as distinct to the liability for equal parts of the members of a civil partnership. The silent or limited partners of a limited partnership, however, are not obliged to pay up more than their contribution, as long as they do not act on behalf of the limited partnership. 1 Individuals who want to set up a corporation, can opt for a public limited company (naamloze vennootschap, hereafter NV) or a private limited company (besloten vennootschap, hereafter BV). Most statutory rules applying to NVs and BVs are identical. The main differences are firstly, that a BV has to have a minimum capital of at least 18.000 euro, as opposed to 50.000 euro for an NV and secondly, * University of Maastricht, The Netherlands. The author wants to thank dr. José Blanco Fernández and prof. dr. Harm-Jan de Kluiver for their critical remarks and kind support. 1. Currently, a partnership law reform is being proposed, creating a single form partnership with an optional legal personality
MEINEMA that only a BV is subject to a mandatory share transfer restriction regime to ensure its closed character. As a consequence, only NVs may issue bearer shares(to the public) and be listed at a stock exchange. The provisions resulting from European Community directives apply mostly to NVs and B Vs alike The freedom of choice of corporation appears from the fact that the incorporation requirements are mainly fomal. There is no limit as to the amount of shareholders of an NV or a BV. Moreover, a legal entity may set up a com pany and be a director at the same time. Law firms and other partnerships may incorporate as an NV or a BV, an NV or Bv may be used to pursue non profit activ ities and other legal entities as foundations and associations may be used to conduct a business or to complete the legal structure of an enterprise. Special provisions do apply to banks, insurance companies and investment companie The freedom of choice of corporation is further illustrated by the easy conversion rules. A legal person may convert itself into a different legal person, art 2: 18 BW. It has to change its articles a notarial document of conversion has to be executed and the necessary fomation requirements have to be fulfilled. In case of conversion of or into a foundation and of an NV or Bv converting into an association, judicial authorise tion is required. IfNVs and BVs qualify as arge companies, a special regime applies. In order to qualify as a large company (structuurvennootschap), a company must have an issued capital of at least 13 million euro, employ at least a hundred workers(by itself or its subsidaries)and it(or a subsidary )must have established a works council (ondememingsraad) pursuant to the Works Council Act (et op de Ondernemingsraden, hereafter WOR). A large company is obliged to institute an independent supervisory board (raad ran commissarissen). The supervisory board has the power to appoint and remove executive directors, to adopt annual accounts Ind its consent is required for certa in decisions of the executive board(raad wan bestuur). To ensure its independence a rather complicated system of controlled co-optation has been created. Both the general meeting of the shareholders and the works council may propose candidates to the superv sory board. The members of the upervisory board are free to appoint whomever they choose, provided that the general meeting or the works council do not have any objections against a certain candidate. When one of them does, the supervisory board needs to enter proceedings at the Enterprise Chamber(Ondernemingskamer)-a special branch of the Amsterdam Court of Appeal (Gerechtshof)-to be able to carry the appointment ugh. International holdings or subsidiaries of intemational corporations are subject to a more lenient regime(the so-called mitigated regime ) In that case, it is the general meeting of the shareholders which has the power to appoint and remove executive directors and to adoptthe annual accounts. 3 An investment company may only be an NV, art. 2: 76a BW. For banks, a superv sory cons isting of at least three member is obligatory, art 10 of the Act on the Supervision of the Cr System 1992 (Wet toezicht kredienvezzn 1992). Insurance companies have to be either an Nve c-operative, art. 28 of the Act on the Supervision of the Insurance Industry 1993( Wet toezicht Currently, the structuurregime for large companies s underreview. Anopinion of the Social
MEINEMA 2 that only a BV is subject to a mandatory share transfer restriction regime to ensure its closed character. As a consequence, only NVs may issue bearer shares (to the public) and be listed at a stock exchange. The provisions resulting from European Community directives apply mostly to NVs and BVs alike. The freedom of choice of corporation appears from the fact that the incorporation requirements are mainly formal. There is no limit as to the amount of shareholders of an NV or a BV. Moreover, a legal entity may set up a company and be a director at the same time. Law firms and other partnerships may incorporate as an NV or a BV, an NV or BV may be used to pursue non-profit activities and other legal entities as foundations and associations may be used to conduct a business or to complete the legal structure of an enterprise. Special provisions do apply to banks, insurance companies and investment companies.2 The freedom of choice of corporation is further illustrated by the easy conversion rules. A legal person may convert itself into a different legal person, art. 2:18 BW. It has to change its articles, a notarial document of conversion has to be executed and the necessary formation requirements have to be fulfilled. In case of conversion of or into a foundation and of an NV or BV converting into an association, judicial authorisation is required. If NVs and BVs qualify as large companies , a special regime applies. In order to qualify as a large company (structuurvennootschap), a company must have an issued capital of at least 13 million euro, employ at least a hundred workers (by itself or its subsidiaries) and it (or a subsidiary) must have established a works council (ondernemingsraad) pursuant to the Works Council Act (Wet op de Ondernemingsraden, hereafter WOR). A large company is obliged to institute an independent supervisory board (raad van commissarissen). The supervisory board has the power to appoint and remove executive directors, to adopt annual accounts and its consent is required for certain decisions of the executive board (raad van bestuur). To ensure its independence a rather complicated system of controlled co-optation has been created. Both the general meeting of the shareholders and the works council may propose candidates to the supervisory board. The members of the supervisory board are free to appoint whomever they choose, provided that the general meeting or the works council do not have any objections against a certain candidate. When one of them does, the supervisory board needs to enter proceedings at the Enterprise Chamber (Ondernemingskamer) - a special branch of the Amsterdam Court of Appeal (Gerechtshof) - to be able to carry the appointment through. International holdings or subsidiaries of international corporations are subject to a more lenient regime (the so-called mitigated regime ). In that case, it is the general meeting of the shareholders which has the power to appoint and remove executive directors and to adopt the annual accounts.3 2. An investment company may only be an NV, art. 2:76a BW. For banks, a supervisory board consisting of at least three member is obligatory, art. 10 of the Act on the Supervision of the Credit System 1992 (Wet toezicht kredietwezen 1992). Insurance companies have to be either an NV or a co-operative, art. 28 of the Act on the Supervision of the Insurance Industry 1993 (Wet toezicht verzekeringsbedrijf 1993). 3. Currently, the structuurregime for large companies is under review. An opinion of the Social
(NON)MANDATORY RULES INDUTCH CORPORA TE LAW Whereas partnerships are of a contractual nature, corporations are regarded as institutions under Dutch law. The company is perceived not merely as a shareholders instrument. but as an institution where numerous interests come together. shareholders, creditors and employees 4 Its institutional features can be deduced from various statutory prov isions. Both the executive and the supervisory board have a duty to act in the interest of the company. Furthermore, the company and all involved in its organisation have a legal duty to behave towards eachother according to reasonableness and faimess. Henceforth, all parties with a legitimate interest may start proceedings for the annulment of a resolution of a company s organ which is in breach of a statutory provision or the articles of association or contrary to reasonableness and fa iness. It is, however, questionable whether employees (or the works council) may in fact rely upon the above-mentioned provisions. Moreover, the general meeting of the shareholders is not regarded as the supreme organ of the company; it is bound by the statutory division of powers just as the otherorgans 6 In the case law, the intuitu personae character of small family companies o quasi-partnerships is recognized, most notably by increasing fiduciary duties in analogy with partnership aw. 7 Recent voices in the literature suggest a new emphasis on the instrumentary character of the company& Statutory and other mandatory rules The aw goveming NVs and B Vs can primarily be found in book 2 of the Dutch Civil Code(Burgerliik Wetboek, hereafter BW). Its mandatory na ture derives from art 2: 25 Bw, which states that the prov isions of Book 2 may only be modified to the extent allowed by the specific provision. Furthermore, NVs issuing securities to the public are subject to the Act on the Supervision of the Securities Trade(wet Toezicht Effectemerkeer 1995, hereafter Wte 1995). The Wte 1995 conta ins obligations on fling a prospectus and on disclosing information. It also prohibits insider dealing Economic Council(SER a consultative committee cons isting of employers employees and 4 governmental representatives)proposes more shareholder influence in the appointmentprocedure See VAn SCHILFgaarde, Van de bv en de nv, Ilth edition, Deventer 1998, Chapter I MAEIJER, Het belangenconflict inde naamloze vennootschap, Deventer 1964 The legal duty only exst towards the supervisory board, but is generally considered to apply to the executive board as well. ASSER-MAELJER 2-ll Vertegenwoordigingen rechtspersoon. De naamloze ende besloten vennootschap 2nd edition, Deventer 2000, nr 293 VAN DERGRINTEN, Handboek voor de naamloze en de besloten vennootschap, 12thedition, Zwolle 1992, nr 231 Hoge Raad 2 1 January 1955, Nederlandse urispridentie 1959, 43(Forumbankl Hoge Raad 31 December 1993, Nederlandse urispnentie 1994, 436( Verenigde Bootlieden) See abo PTLO-RAAIMAKERS, Vennootschap- en rechtspersonenrecht 4th edition, Deventer 8. Cf. BLANCO FERNANDEZ, Vennootschapsrechtelijke werk ing van stemovereenkomsten vennootschapsrecht RM Themis 1999, p. 43 ff. and RAAIJMAKERS, Rechtspersonen tussen contract en instituut Deventer 1987
(NON) MANDATORY RULES IN DUTCH CORPORATE LAW 3 Whereas partnerships are of a contractual nature, corporations are regarded as institutions under Dutch law. The company is perceived not merely as a shareholders instrument, but as an institution where numerous interests come together: shareholders , creditors and employees . 4 Its institutional features can be deduced from various statutory provisions. Both the executive and the supervisory board have a duty to act in the interest of the company.5 Furthermore, the company and all involved in its organisation have a legal duty to behave towards eachother according to reasonableness and fairness . Henceforth, all parties with a legitimate interest may start proceedings for the annulment of a resolution of a company s organ which is in breach of a statutory provision or the articles of association or contrary to reasonableness and fairness . It is, however, questionable whether employees (or the works council) may in fact rely upon the above-mentioned provisions. Moreover, the general meeting of the shareholders is not regarded as the supreme organ of the company; it is bound by the statutory division of powers just as the other organs.6 In the case law, the intuitu personae character of small family companies or quasi-partnerships is recognized, most notably by increasing fiduciary duties in analogy with partnership law. 7 Recent voices in the literature suggest a new emphasis on the instrumentary character of the company.8 3 Statutory and other mandatory rules The law governing NVs and BVs can primarily be found in book 2 of the Dutch Civil Code (Burgerlijk Wetboek, hereafter BW). Its mandatory nature derives from art. 2:25 BW, which states that the provisions of Book 2 may only be modified to the extent allowed by the specific provision. Furthermore, NVs issuing securities to the public are subject to the Act on the Supervision of the Securities Trade (Wet Toezicht Effectenverkeer 1995, hereafter Wte 1995). The Wte 1995 contains obligations on filing a prospectus and on disclosing information. It also prohibits insider dealing. Economic Council (SER a consultative committee consisting of employers , employees and governmental representatives) proposes more shareholder influence in the appointment procedure. 4. See VAN SCHILFGAARDE, Van de BV en de NV, 11th edition, Deventer 1998, Chapter 1. MAEIJER, Het belangenconflict in de naamloze vennootschap, Deventer 1964. 5. The legal duty only exists towards the supervisory board, but is generally considered to apply to the executive board as well. ASSER-MAEIJER 2-III, Vertegenwoordiging en rechtspersoon. De naamloze en de besloten vennootschap, 2nd edition, Deventer 2000, nr. 293. VAN DER GRINTEN, Handboek voor de naamloze en de besloten vennootschap, 12th edition, Zwolle 1992, nr. 231. 6. Hoge Raad 21 January 1955, Nederlandse Jurisprudentie 1959, 43 (Forumbank). 7. Hoge Raad 31 December 1993, Nederlandse Jurisprudentie 1994, 436 (Verenigde Bootlieden). See also PITLO-RAAIJMAKERS, Vennootschaps- en rechtspersonenrecht, 4th edition, Deventer 2000, nr. 1.93. 8. Cf. BLANCO FERNANDEZ, Vennootschapsrechtelijke werking van stemovereenkomsten, Ondernemingsrecht 1999, p. 151. See also TIMMERMAN, Over de toekomst van het vennootschapsrecht, RM Themis 1999, p. 43 ff. and RAAIJMAKERS, Rechtspersonen tussen contract en instituut, Deventer 1987
MEINEMA The Minister of Finance has delegated his authority to supervise the compliance with the Wte 1995 to the Securities board of the Netherlands (Stichting Toezicht Effectenmerkeer, hereafter STE). The STE is also the authority responsible for the supervision of the Disclosure of Ma jor Holdings in Listed Companies Act 1996(Wet Melding Zeggenschap 1996). On the basis of this Act, a person who acquires or disposes of a certa in holding in the capital of a listed NV must notify this fortwith to the Nv and to the StE. The latter discloses the data to the general public. Both Acts are based upon European Community Directives. Furthermore, the StE carries out the assessment of licence applications for insitutions seeking admission to the Euronext Amsterdam Stock Market, as well as the possible withdrawal of a licence It may impose penalties and administrative fines in case of infringement of the Acts Companies listed to the Euronext Amsterdam Stock Market have to comply with its Listing and Issuing Rules( Fondsenreglement ) The compliance with the listing and Issuing Rules is superv ised by Euronext NV, which decides upon advice of the Listing and Issuing Rules Advisory Comm ittee. It may remove or suspend a listing. Until recently, other self-regulatory rules could be found in the field of take-overs. The Socal Econom ic Council (SER) had issued a Code of Conduct on Take-overs(Fusiegedragsregels) Without many substantive changes, these rulesare now incorporated in the Wte 1995 10 In case of a public bid the concemed have to give relevant infomation to the shareholders and trade Dutch law loes not provide fora mandatory take-over bid after exceeding a of shares in a public company Whilst company law is codified, it is the case law which gives substance to the statutory open noms. For instance, the Supreme Court(Hoge Raad) has established a firm body of case law conceming the lifting the veil doctrine. A parent com pany may be held liable in tort towards a third party for breach of contract by its subsidiary only under specific circumstances. Determining factors are the level of interference of the parent company, who must knowingly prejudice the creditor of the subsidiary, thereby violating a duty of care towards that creditor A special feature of Dutch company law is the mportance of the investigation procedure(enqueterecht), as set out in artt. 2: 344-359 BW. The above-mentioned Enterprise Cham ber may order an investigation into the affairs of a com pany if it inds well-grounded reasons to doubt the soundness of the company s policy (art 2: 350 BW). A request hereto may be made by one or more shareholders representing at least ten procent of the issued share capital or a nominal value of Dfl 500.000, by a trade union whose members are employed by the company or by the ee further GRUNDMANN-VAN DE KROL Koersen door het effectenrecht, 3rd edition Deventer 2000 Wet openbare bedingen op effecten, Statsblad 2001, nr. 181. The substantive rules are lai down in the besluit toezicht effectenverkeer. staatsblad 2001.316 11. E.g. Hoge Raad 25 september 1981, Nederlandse Jurispneentie 1982, 443(Osby ) Hoge Raad 19 february 1988, Nederlandse Jurisprudentie 1988, 487(Albada Jelgersma), Hoge Raad 12 june 1998, Nederlandse Jurispnadentie 1998, 727( CoralStalt)See e.g. BARTMAN DORRESTEIJN 4thedtion, deve
MEINEMA 4 The Minister of Finance has delegated his authority to supervise the compliance with the Wte 1995 to the Securities Board of the Netherlands (Stichting Toezicht Effectenverkeer, hereafter STE). The STE is also the authority responsible for the supervision of the Disclosure of Major Holdings in Listed Companies Act 1996 (Wet Melding Zeggenschap 1996). On the basis of this Act, a person who acquires or disposes of a certain holding in the capital of a listed NV must notify this fortwith to the NV and to the STE. The latter discloses the data to the general public. Both Acts are based upon European Community Directives. Furthermore, the STE carries out the assessment of licence applications for insitutions seeking admission to the Euronext Amsterdam Stock Market, as well as the possible withdrawal of a licence. It may impose penalties and administrative fines in case of infringement of the Acts. Companies listed to the Euronext Amsterdam Stock Market have to comply with its Listing and Issuing Rules (Fondsenreglement). The compliance with the Listing and Issuing Rules is supervised by Euronext NV, which decides upon advice of the Listing and Issuing Rules Advisory Committee. It may remove or suspend a listing.9 Until recently, other self-regulatory rules could be found in the field of take-overs. The Social Economic Council (SER) had issued a Code of Conduct on Take-overs (Fusiegedragsregels). Without many substantive changes, these rules are now incorporated in the Wte 1995.10 In case of a public bid the parties concerned have to give relevant information to the shareholders and trade unions. Dutch law does not provide for a mandatory take-over bid after exceeding a certain percentage of shares in a public company. Whilst company law is codified, it is the case law which gives substance to the statutory open norms . For instance, the Supreme Court (Hoge Raad) has established a firm body of case law concerning the lifting the veil doctrine. A parent company may be held liable in tort towards a third party for breach of contract by its subsidiary only under specific circumstances. Determining factors are the level of interference of the parent company, who must knowingly prejudice the creditor of the subsidiary, thereby violating a duty of care towards that creditor.11 A special feature of Dutch company law is the importance of the investigation procedure (enquêterecht), as set out in artt. 2:344-359 BW. The above-mentioned Enterprise Chamber may order an investigation into the affairs of a company if it finds well-grounded reasons to doubt the soundness of the company s policy (art. 2:350 BW). A request hereto may be made by one or more shareholders representing at least ten procent of the issued share capital or a nominal value of Dfl. 500.000, by a trade union whose members are employed by the company or by the 9. See further GRUNDMANN-VAN DE KROL, Koersen door het effectenrecht, 3rd edition, Deventer 2000. 10. Wet openbare biedingen op effecten, Staatsblad 2001, nr. 181. The substantive rules are laid down in the Besluit toezicht effectenverkeer, Staatsblad 2001, 316. 11. E.g. Hoge Raad 25 september 1981, Nederlandse Jurisprudentie 1982, 443 (Osby), Hoge Raad 19 february 1988, Nederlandse Jurisprudentie 1988, 487 (Albada Jelgersma), Hoge Raad 12 june 1998, Nederlandse Jurisprudentie 1998, 727 (Coral/Stalt). See e.g. BARTMAN/DORRESTEIJN, Van het concern, 4th edition, Deventer 2000, p. 225 ff
(NON)MANDATORY RULES INDUTCH CORPORA TE LAW advocate-general at the Amsterdam Court of Appeal. One or more court-appointed investigators carry out the investigation. They have full access to the company books and premises and they are to receive full co-operation of the company directors and employees. The investigator s report is sent to the applicants and to the company Ifthe report gives evidence of mismanagement the Enterprise Chamber may take rather far-reaching measures, such as the annulment of a resolution of an of the company, the suspension or removal of directors, the appointme directors, temporary transfer of shares, temporary devation company articles, and the winding-up of the company. These and other measures may also be sought in preliminary relief. The Enterprise Chamber and the Supreme Court have gradually expanded the notion of mismanagement. Mismanagement is described as acting in breach of elementary principles of sound entrepreneurship. Without actually establishing a principle, the Enterprise Chamber concentrates on the conduct not only of the executive board, but also of the superv sory board and the general meeting. Even the onduct of an individual shareholder may constitute mismanagement of the com pany The investigation procedure has proven to be quite succesful in deadlock situations Trade unions have also had some success in establishing consultation and information rights e.g. in case of the closing down of a business. Although restoration is not an option for an insolvent com pany, an investigation may still be useful to establish responsibility. With an investigators report in hand it is easier to prove liability of a director for a bankrupcy. One of the latest fields of app lication of the investigation procedure is the take-over battle. Louis Vuitton Moet Hennessy attempting to take over Gucci has turned into a legal boxing match with Six udgments.14 Because of its increasing popularity, the scope of the investigation procedure is much discussed. 15 Not only does the works council have an influence on the appointment of members of the supervisory board in the structuurregime, it also has the right to give dvice to the entrepreneur on a catalogue of mportant decisions which may effect the situation of the employees, e.g. merger or take-over decisions, the closing down or transfer of a business, a collective mass dismissal (art. 25 WOR). If the advice notasked or followed, the works council may challenge the decision at the Enterprise Cf. Hoge Raad 10 January 1990, Nederlandse Junispnadentie 1990, 466(Ogem), where t held that the ams of the investigation procedure are not only the reorganization of the compay and the restoration of healthy relations, but abo to give diclosure and to establish who was respons ble for the mismanagement E.g. Ondernemngskamer 29 August 1985, Nederlandse Jurispndentie 1986, 578( Howson Igraphy) A o. Ondenemingskamer 27 May 1999, Nederlandse Jurispnidentie 1999, 487. Hoge Raad 27 September 2000, Nederland se Junispndentie 2000, 653. Ondememingskamer 8 March 2001 Nederlandse Juripnudentie 2001, 224. The match has ended by Pinault Printemps Redoute buy ing the 20%share capital ofL VMH Cf BLANCO FERNANDEZ Wetsuitleg en de kem van het enqueterecht, WPNR 2001, P 649 ff. DORRESTEIJN, Het onderzoek bi Gucci en de kem van het enqueterecht, WPNR 2001, P 647
(NON) MANDATORY RULES IN DUTCH CORPORATE LAW 5 advocate-general at the Amsterdam Court of Appeal. One or more court-appointed investigators carry out the investigation. They have full access to the company s books and premises and they are to receive full co-operation of the company s directors and employees. The investigator s report is sent to the applicants and to the company. If the report gives evidence of mismanagement , the Enterprise Chamber may take rather far-reaching measures, such as the annulment of a resolution of an organ of the company, the suspension or removal of directors, the appointment of interim directors, temporary transfer of shares, temporary deviation of the company s articles, and the winding-up of the company. These and other measures may also be sought in preliminary relief. The Enterprise Chamber and the Supreme Court have gradually expanded the notion of mismanagement. Mismanagement is described as acting in breach of elementary principles of sound entrepreneurship . 12 Without actually establishing a principle, the Enterprise Chamber concentrates on the conduct not only of the executive board, but also of the supervisory board and the general meeting. Even the conduct of an individual shareholder may constitute mismanagement of the company. The investigation procedure has proven to be quite succesful in deadlock situations. Trade unions have also had some success in establishing consultation and information rights e.g. in case of the closing down of a business. 13 Although restoration is not an option for an insolvent company, an investigation may still be useful to establish responsibility. With an investigators report in hand it is easier to prove liability of a director for a bankrupcy. One of the latest fields of application of the investigation procedure is the take-over battle. Louis Vuitton Moët Hennessy attempting to take over Gucci has turned into a legal boxing match with six judgments.14 Because of its increasing popularity , the scope of the investigation procedure is much discussed.15 Not only does the works council have an influence on the appointment of members of the supervisory board in the structuurregime, it also has the right to give advice to the entrepreneur on a catalogue of important decisions which may effect the situation of the employees, e.g. merger or take-over decisions, the closing down or transfer of a business, a collective mass dismissal (art. 25 WOR). If the advice is not asked or followed, the works council may challenge the decision at the Enterprise 12. Cf. Hoge Raad 10 January 1990, Nederlandse Jurisprudentie 1990, 466 (Ogem), where it held that the aims of the investigation procedure are not only the reorganization of the company and the restoration of healthy relations, but also to give disclosure and to establish who was responsible for the mismanagement. 13. E.g. Ondernemingskamer 29 August 1985, Nederlandse Jurisprudentie 1986, 578 (Howson Algraphy). 14. A. o. Ondernemingskamer 27 May 1999, Nederlandse Jurisprudentie 1999, 487. Hoge Raad 27 September 2000, Nederlandse Jurisprudentie 2000, 653. Ondernemingskamer 8 March 2001, Nederlandse Jurisprudentie 2001, 224. The match has ended by Pinault Printemps Redoute buying the 20% share capital of LVMH. 15. Cf. BLANCO FERNANDEZ, Wetsuitleg en de kern van het enquêterecht, WPNR 2001, p. 649 ff. DORRESTEIJN, Het onderzoek bij Gucci en de kern van het enquêterecht, WPNR 2001, p. 647 ff
MEINEMA Cham ber on the grounds that the entrepreneur could not rea sonably have come to this decision, considering all the interests(art 26 WOR). The Enterprise Cham ber is rticuarly keen on ensuring that the works council is a ble to give its a dvice at a time where it may have a real influence on the outcome of the decision. Furthermore, the works council has to give its approval to-broadly put-all matters relating to the working conditions in the enterprise(art. 27 WOR). If the approval is denied, the entrepreneur needs to ask the magistrate s court(kantonrechter) for permission to implement the me A certa in workers influence is also derived from the fact that trade unions are authorized to instigate an investigation procedure Mandatory rules: the limitof public policy As mentioned above, art. 2: 25 B W states that the provisions of Book 2 Bw may only be modified to the extent allowed by the specific provision. The enabling provisions are to be recognized by terms such as unless provided otherwise in the rticles, or the articles may state etc. Although it is generally held that art. 2: 25 BW is responsible for the mandatory nature of Dutch company aw, its limits are not quite clear Until recently, all articles of assocation were subject to prior govemment approval. The Ministry of Justice had to give a decaration of no objection before a company could incoporate and before an alteration of its articles could have effect. The Ministry had issued guidelines as to which provisions in the articles were allowed and which were not. Therefore, the lim its were set by the Ministry and rarely questioned in case law Now the situation has changed. The ministerial approval of a company rticles has been a bolished. The declaration of no objection nevertheless remains required for establishing whether the persons involved have no criminal antecedents nor an insolvency record. At the same time, some of the guidelines have been incorporated in book 2 BW. 17 Whilst the ministerial approval articles is no longer required, each civil law notary-an official who is authorised by law to record legal transactions-has the sole responsibility to ensure that the articles are in compliance with the statuto to some other le systems, the registration of the company under Dutch law is not subject to judical(or other) control. The incorporation of a company takes place upon the execution of the fomation document(akte van oprichting ) Upon registration and payment pursuant to the minimum capital requirements the directors cease to be jointly and severally liable for acts of the company Once the articles of association are operative, they function as the constitution of the company. Thus, resolutions of the com pany s organs may be annulled when they are in breach of the articles or in breach of statutory provisions (artt. 2: 14 and 15 BW). 8 At their turn, provisions in articles of association which are E.g. Hoge Raad 7October 1998, Nederlandse urispridentie 1999, 778(NS Reizigers) Act of 22 Juni 2000, Staatsblad 2000, 283. Pres. Rechtbank Assen, 10 May 1990, Nederlandse Jurisprindentie 1992, 487. Rechtbank Almelo, 6 March 1991, Nederlandse Jurispraddente 1992, 485
MEINEMA 6 Chamber on the grounds that the entrepreneur could not reasonably have come to this decision, considering all the interests (art 26 WOR). The Enterprise Chamber is particularly keen on ensuring that the works council is able to give its a dvice at a time where it may have a real influence on the outcome of the decision.16 Furthermore, the works council has to give its approval to - broadly put - all matters relating to the working conditions in the enterprise (art. 27 WOR). If the approval is denied, the entrepreneur needs to ask the magistrate s court (kantonrechter) for permission to implement the measure. A certain workers influence is also derived from the fact that trade unions are authorized to instigate an investigation procedure. 4 Mandatory rules: the limit of public policy As mentioned above, art. 2:25 BW states that the provisions of Book 2 BW may only be modified to the extent allowed by the specific provision. The enabling provisions are to be recognized by terms such as unless provided otherwise in the articles , or the articles may state , etc. Although it is generally held that art. 2:25 BW is responsible for the mandatory nature of Dutch company law, its limits are not quite clear. Until recently, all articles of association were subject to prior government approval. The Ministry of Justice had to give a declaration of no objection before a company could incorporate and before an alteration of its articles could have effect. The Ministry had issued guidelines as to which provisions in the articles were allowed and which were not. Therefore, the limits were set by the Ministry and rarely questioned in case law. Now the situation has changed. The ministerial approval of a company s articles has been abolished. The declaration of no objection nevertheless remains required for establishing whether the persons involved have no criminal antecedents nor an insolvency record. At the same time, some of the guidelines have been incorporated in book 2 BW. 17 Whilst the ministerial approval of a company s articles is no longer required, each civil law notary - an official who is authorised by law to record legal transactions - has the sole responsibility to ensure that the articles are in compliance with the statutory provisions. As distinct to some other legal systems, the registration of the company under Dutch law is not subject to judicial (or other) control. The incorporation of a company takes place upon the execution of the formation document (akte van oprichting). Upon registration and payment pursuant to the minimum capital requirements the directors cease to be jointly and severally liable for acts of the company. Once the articles of association are operative, they function as the constitution of the company. Thus, resolutions of the company s organs may be annulled when they are in breach of the articles or in breach of statutory provisions (artt. 2:14 and 15 BW).18 At their turn, provisions in articles of association which are 16. E.g. Hoge Raad 7 October 1998, Nederlandse Jurisprudentie1999, 778 (NS Reizigers). 17. Act of 22 juni 2000, Staatsblad 2000, 283. 18. Pres. Rechtbank Assen, 10 May 1990, Nederlandse Jurisprudentie 1992, 487. Rechtbank Almelo, 6 March 1991, Nederlandse Jurisprudentie 1992, 485
(NON)MANDATORY RULES INDUTCH CORPORA TE LAW in breach of mandatory statutory provisions, public policy and/or mora lity are null and void(art. 3: 40 BW). Whilst art. 2: 25 BW lays down a fomal cri terion establishing the manda tory nature of statutory prov isions, the ratio for mandatory orporate la w especally lies in the protection of creditors, (minority) shareholders Ind employees. 19 As these notions are incorporated into statutory law, there seems to be little room left for public policy and morality as a separate category is does not apply, however, to the notion of reasonableness and faimess ofart 2: 8 BW. It is the comerstone of the protection of m inority shareholders under dutch corporate law.0 First, as mentioned above, a minority shareholder may apply for nnulment of a resolution of a company s organ if it is in breach of reasonableness and fairness, according to which the company and all involved have to behave. This may even set aside a resolution which is in compliance with prov isions in the company s articles. Secondly, acting in breach of reasonableness and faimess may constitute or contribute to mismanagement, whereupon the Enterprise Chamber may take the above-mentioned measures aga inst the company 21 Thirdly, there is a certain notion of reasonableness and fa iness incorporated in the dispute settlement procedure(artt. 2: 335-343 BW). One or more shareholders of a private company who represent at least one third of the share capital may instigate proceedings at a district court (rechtbank)against any other shareholder who conducts hm self in a manner unfairly prejudicial to the company s interest in order to obtain a ompulsory transfer of his shares. Reversely, a shareholder whose interests are damaged by the conduct of one or more other shareholders in such a way that he can no longer reasonably be required to continue being a shareholder, may demand to be bought out at a fair price Whereas Dutch corporate law is visibly permeated with reasonableness and iness, public policy and morality lead a more hidden existence. The latter notions do arise when the validity of shareholders agreements is at stake The different status of clauses in the articles and of shareholde agreements A general statutory provision on shareholder agreements does not exist in Dutch corporate law. Just as the articles of association, shareholder agreements find their limits in art. 3: 40 BW: mandatory law, public policy and morality. Shareholder agreements are subject to contract aw provisions such as fraud, duress and mistake Whereas the articles of association have to comply with mandatory corporate law, it Is uncertain how far mandatory corporate law affects the valid ity of shareholder Cf. TIMMERMAN, Waarom hebben w dwngend vennootschapsrecht?, n: Ondememingsrechtelijke Contracten, uitgave vanwege het Instituut voor Ondemem ingsrecht deel 1991,p.If DE KLUIVER, The European Pivate Company? A Dutch Perspective, in: The European Private Compay?, De Kluver, Van Gerven(eds ) Antwerp 1995, p 122 ff. Ondememngskamer Il March 1999, Nederlandse Junispndentie 1999, 351(Breevast Ondememingskamer 27 May 1999, Nederlandse urisprzdentie 1999, 487( Gucci). Implicit Hoge Raad 9 July 1990, Nederlandse Jurispnudentie 1991, 51(Sluis) Crit DORRESTEIJN, t.ap.. p 648
(NON) MANDATORY RULES IN DUTCH CORPORATE LAW 7 in breach of mandatory statutory provisions, public policy and/or morality are null and void (art. 3:40 BW). Whilst art. 2:25 BW lays down a formal criterion for establishing the mandatory nature of statutory provisions, the ratio for mandatory corporate law especially lies in the protection of creditors, (minority) shareholders and employees.19 As these notions are incorporated into statutory law, there seems to be little room left for public policy and morality as a separate category. This does not apply, however, to the notion of reasonableness and fairness of art. 2:8 BW. It is the cornerstone of the protection of minority shareholders under Dutch corporate law.20 First, as mentioned above, a minority shareholder may apply for annulment of a resolution of a company s organ if it is in breach of reasonableness and fairness, according to which the company and all involved have to behave. This may even set aside a resolution which is in compliance with provisions in the company s articles. Secondly, acting in breach of reasonableness and fairness may constitute or contribute to mismanagement , whereupon the Enterprise Chamber may take the above-mentioned measures against the company.21 Thirdly, there is a certain notion of reasonableness and fairness incorporated in the dispute settlement procedure (artt. 2:335-343 BW). One or more shareholders of a private company who represent at least one third of the share capital may instigate proceedings at a district court (rechtbank) against any other shareholder who conducts himself in a manner unfairly prejudicial to the company s interest in order to obtain a compulsory transfer of his shares. Reversely, a shareholder whose interests are damaged by the conduct of one or more other shareholders in such a way that he can no longer reasonably be required to continue being a shareholder, may demand to be bought out at a fair price. Whereas Dutch corporate law is visibly permeated with reasonableness and fairness, public policy and morality lead a more hidden existence. The latter notions do arise when the validity of shareholders agreements is at stake. 5 The different status of clauses in the articles and of shareholder agreements A general statutory provision on shareholder agreements does not exist in Dutch corporate law. Just as the articles of association, shareholder agreements find their limits in art. 3:40 BW: mandatory law, public policy and morality. Shareholder agreements are subject to contract law provisions such as fraud, duress and mistake. Whereas the articles of association have to comply with mandatory corporate law, it is uncertain how far mandatory corporate law affects the validity of shareholder 19. Cf. TIMMERMAN, Waarom hebben wij dwingend vennootschapsrecht?, in: Ondernemingsrechtelijke Contracten, uitgave vanwege het Instituut voor Ondernemingsrecht deel 14, Deventer 1991, p. 1 ff. 20. DE KLUIVER, The European Private Company? A Dutch Perspective, in: The European Private Company?, De Kluiver, Van Gerven (eds.), Antwerp 1995, p. 122 ff. 21. Ondernemingskamer 11 March 1999, Nederlandse Jurisprudentie 1999, 351 (Breevast). Ondernemingskamer 27 May 1999, Nederlandse Jurisprudentie 1999, 487 (Gucci). Implicit Hoge Raad 9 July 1990, Nederlandse Jurisprudentie1991, 51 (Sluis). Crit. DORRESTEIJN, t.a.p., p. 648
MEINEMA In three judgments the Supreme Court has acknowledged the validity of voting agreements in principle. 22 The Supreme Court held that since a voting right is a right given to a shareholder to serve his own interest in the company, he is free to commit himself as to the exercise of his voting right, provided that this does not lead to socially improper consequences 3 The mere fact that the agreement may imply that a vote cast by a shareholder may differ from his actual intention does not make the agreement improper. A voting greement between a shareholderand a third party is held to be valid in principle as well In the literature certain categories of improper agreements are identified. Most authors regard a voting agreement by which a shareholder commits himself to vote according to the instructions of the executive or supervisory board null and void No more accepted are voting agreements with a consideration in cash or in kind.25 An indefinite contract with a general instruction cause is considered to be improper as well. 26 A voting agreement is held to be contrary to public policy and morality when its a im or consequence is to evade the law.27 Since case law is scarce, a great deal of uncerta nty as to the validity of shareholders agreements in concrete circumstances rem ains A valid shareholders agreement is not necessarily upheld in all circumstances. If the fulfilment of the obligation resulting from a voting agreement would be contrary to reasonableness and faimess, the shareholder cannot be held to vote in onfomm ity with the agreement. 8 In the Coster case, three of the four shareholders of a private com pany had an agreement to meet and vote prior to every general meeting. where they all would vote in conform ity with the ma jority view of the pre-meeting29 The issue at stake was the company almost fulfilling the requirements of a arge company, which meant they would have to institute an independent supervisory board Two out of three shareholders in the pre-meeting tried to avoid that the equity threshold would be passed and decided a super dividend should be declared In the subsequent general meeting Coster, the third shareholder, refused to vote in Hoge Raad 30 June 1944, Nederlandse Juriypnadentie 1944, 465(Wennex, Hoge Raad 13 November 1959, Nedertand se Jurispnadentie 1960, 472(Dstilleerderij Melchers), Hoge Raad 19 February 1960, Nederlandse Jurisprudentie 1960, 473(Auro Hoge Raad 30 June 1944, Nederlandse Jurisprudentie 1944, 465 E.g. WAAIJER Aandeelhoudersovereenkomsten, Deventer 1996, p. 14. MOHR, Spijkers Ondenemingsrecht op de breukliin van praktik en wetenschap, oratie, Amhem 1993, p. 16. More lenient BRENNINKMEIJER, Stemovereenkomsten van aandeehouders, Deventer 1973, p. 152 and DE KLUIVER, Jont ventures en stemovereenkomsten. Een rechtsvergelijkend perspectief, in Joint Ventures, Ars Equ 1995, p. 433 ASSER-MAEUJER, o.C. nr. 288. VAN SCHILFGAARDE. o.c. nr. 67. PITLO-RAALMAKERS o.c. nr 5.94 Cf Hand boek, o c, nr. 217.. ASSER-MAEDER, o.c., nr. 289 Rechtbank Alkmaar 15 December 1976, Nederlandse urisprzdentie 1978, 319 30 See supra paragraph 2
MEINEMA 8 agreements. Thus, the notions of public policy and morality come into play. In three judgments the Supreme Court has acknowledged the validity of voting agreements in principle.22 The Supreme Court held that since a voting right is a right given to a shareholder to serve his own interest in the company, he is free to commit himself as to the exercise of his voting right, provided that this does not lead to socially improper consequences . 23 The mere fact that the agreement may imply that a vote cast by a shareholder may differ from his actual intention does not make the agreement improper. A voting agreement between a shareholder and a third party is held to be valid in principle as well. In the literature certain categories of improper agreements are identified. Most authors regard a voting agreement by which a shareholder commits himself to vote according to the instructions of the executive or supervisory board null and void.24 No more accepted are voting agreements with a consideration in cash or in kind.25 An indefinite contract with a general instruction clause is considered to be improper as well.26 A voting agreement is held to be contrary to public policy and morality when its aim or consequence is to evade the law.27 Since case law is scarce, a great deal of uncertainty as to the validity of shareholders agreements in concrete circumstances remains. A valid shareholders agreement is not necessarily upheld in all circumstances. If the fulfilment of the obligation resulting from a voting agreement would be contrary to reasonableness and fairness, the shareholder cannot be held to vote in conformity with the agreement.28 In the Coster case, three of the four shareholders of a private company had an agreement to meet and vote prior to every general meeting, where they all would vote in conformity with the majority view of the pre-meeting.29 The issue at stake was the company almost fulfilling the requirements of a large company , which meant they would have to institute an independent supervisory board.30 Two out of three shareholders in the pre-meeting tried to avoid that the equity threshold would be passed and decided a super dividend should be declared. In the subsequent general meeting Coster, the third shareholder, refused to vote in 22. Hoge Raad 30 June 1944, Nederlandse Jurisprudentie 1944, 465 (Wennex), Hoge Raad 13 November 1959, Nederlandse Jurisprudentie 1960, 472 (Distilleerderij Melchers), Hoge Raad 19 February 1960, Nederlandse Jurisprudentie1960, 473 (Aurora). 23. Hoge Raad 30 June 1944, Nederlandse Jurisprudentie 1944, 465. 24. E.g. WAAIJER, Aandeelhoudersovereenkomsten, Deventer 1996, p. 14. MOHR, Spijkers. Ondernemingsrecht op de breuklijn van praktijk en wetenschap, oratie, Arnhem 1993, p. 16. More lenient BRENNINKMEIJER, Stemovereenkomsten van aandeelhouders, Deventer 1973, p. 152 and DE KLUIVER, Joint ventures en stemovereenkomsten. Een rechtsvergelijkend perspectief, in Joint Ventures, Ars Aequi 1995, p. 433. 25. ASSER-MAEIJER, o.c., nr. 288. 26. VAN SCHILFGAARDE, o.c.,nr. 67. 27. PITLO-RAAIJMAKERS, o.c., nr. 5.94. 28. Cf. Handboek, o.c., nr. 217.1. ASSER-MAEIJER, o.c., nr. 289. 29. Rechtbank Alkmaar 15 December 1976, Nederlandse Jurisprudentie1978, 319. 30. See supra paragraph 2
(NON)MANDATORY RULES INDUTCH CORPORA TE LAW favour of the decaration of the dividend. He sought prelim inary relief by asking the court to prohibit such a resolution to be taken and to prohibit the other shareholders to hold him to the a greement The court held that since the a im of the distribution was to evade mandatory corpora te law, the pre-meeting resolution was contrary to mandatory law and morality and as a consequence null and void. According to the court, this implied that Coster could not reasonably be held to vote in confomity Reversely, shareholder agreements may affect corporate decision-making. 31 When establishing the valid ity of the voting agreement, the Supreme Court made a distinction between the commitment to the agreement and the exercised vote. It considered a vote to be valid even if it is in breach of the contract 32 Nevertheless. in recent case law the Court held that acting in breach of a shareholders agreement may lead to liability in tort 33 In the literature, it is contended that voting contrary b a shareholders agreement may cause a com pany s resolution to be in breach of reasonableness and fa 34 Thus, a distinction is made between agreements with ll shareholders partcipating and other agreements. Voting contrary to a shareholders agreement may also imply mismanagement.35 Freedom to complete or modify statutory rules-examples 6.1 Shareholders contributions of personal services or financing Art.2:81/19236 BW states that no additional obligations may be imposed on a shareholder against his will, other than the payment of the nom inal value of the share in full, not even by an alteration of the articles of assocation. A resolution imposing additional obligations would therefore necessarily have to be by unanimous vote Additional obligations may be laid down in the articles at the time of incorporation ince all initial shareholders agree. New shareholders are bound by the additional obligations as well, since they voluntarily submit themselves to the articles by joining the company as a shareholder 3 7 To insert add it ional obligations by means of an alteration of the articles is only possible if all shareholders a gree. The articles may Cf. BLANCO FERNANDEZ, Vennootschapsrechtelijke werk ing van stemovereenkomsten, ff. and DE KLUIVER De ondememingsrechtelijke contractspraktifk: onderhandelen n de schaduw van de wet, Contrncteren: Tydschriff voor de tractspraktik 2001, p 4 ff. 32. Hoge Raad 30 June 1944, Nederlandse urispradentie 1944, 465. In practice, the commitment will be ensured by a penalty clause Hoge Raad 29 November 1996, Nederlandse Jurisprudentie 1997, 345. Crit MOHR, Hoe schatplichtig is de vennootschap aan het vnje contractenrecht, Cahenbundel, 1997, P. 223 ff. 34 A.o. KOELEMEIJER Redelijkhei en billijkheid n kapitaalvennootschappen, Deventer 2000, p.40f Imphcit Ondememingskamer 20 May 1999, Nederlandse Jhurispndentie 2000, 199, ndernemingsredt 2000, 72 note Blanco Femandez. The frst number is the provision for the Nv, thesecond for the Bv Materially both are equal. ASSER-MAELJER
(NON) MANDATORY RULES IN DUTCH CORPORATE LAW 9 favour of the declaration of the dividend. He sought preliminary relief by asking the court to prohibit such a resolution to be taken and to prohibit the other shareholders to hold him to the agreement. The court held that since the aim of the distribution was to evade mandatory corporate law, the pre-meeting resolution was contrary to mandatory law and morality and as a consequence null and void. According to the court, this implied that Coster could not reasonably be held to vote in conformity with the agreement. Reversely, shareholder agreements may affect corporate decision-making.31 When establishing the validity of the voting agreement, the Supreme Court made a distinction between the commitment to the agreement and the exercised vote. It considered a vote to be valid even if it is in breach of the contract.32 Nevertheless, in recent case law the Court held that acting in breach of a shareholders agreement may lead to liability in tort.33 In the literature, it is contended that voting contrary to a shareholders agreement may cause a company s resolution to be in breach of reasonableness and fairness.34 Thus, a distinction is made between agreements with all shareholders partcipating and other agreements. Voting contrary to a shareholders agreement may also imply mismanagement.35 6 Freedom to complete or modify statutory rules - examples 6.1 Shareholders contributions of personal services or financing Art. 2:81/19236 BW states that no additional obligations may be imposed on a shareholder against his will, other than the payment of the nominal value of the share in full, not even by an alteration of the articles of association. A resolution imposing additional obligations would therefore necessarily have to be by unanimous vote. Additional obligations may be laid down in the articles at the time of incorporation, since all initial shareholders agree. New shareholders are bound by the additional obligations as well, since they voluntarily submit themselves to the articles by joining the company as a shareholder.37 To insert additional obligations by means of an alteration of the articles is only possible if all shareholders agree. The articles may 31. Cf. BLANCO FERNANDEZ, Vennootschapsrechtelijke werking van stemovereenkomsten, Ondernemingsrecht 1999, p. 148 ff. and DE KLUIVER, De ondernemingsrechtelijke contractspraktijk: onderhandelen in de schaduw van de wet, Contracteren: Tijdschrift voor de contractspraktijk 2001, p.4 ff. 32. Hoge Raad 30 June 1944, Nederlandse Jurisprudentie 1944, 465. In practice, the commitment will be ensured by a penalty clause. 33. Hoge Raad 29 November 1996, Nederlandse Jurisprudentie 1997, 345. Crit. MOHR, Hoe schatplichtig is de vennootschap aan het vrije contractenrecht, Cahenbundel, 1997, p. 223 ff. 34. A.o. KOELEMEIJER, Redelijkheid en billijkheid in kapitaalvennootschappen, Deventer 2000, p. 140 ff. 35. Implicit Ondernemingskamer 20 May 1999, Nederlandse Jurisprudentie 2000, 199, Jurisprudentie Ondernemingsrecht2000, 72 note Blanco Fernández. 36. The first number is the provision for the NV, the second for the BV. Materially both are equal. 37. ASSER-MAEIJER, o.c., nr. 98
MEINEMA even state that a company s organ may decide to impose additional obligations to shareholders, which have to be specifically described in the articles 38 A shareholders agreement containing additional contributions itself an expression of the will of the shareholder, and would therefore be in conformity with art.281/192BW The exact scope of art. 2: 81/192 BW is not clear. Since an extensive interpretation of the obligations would subject virtually all alterations of the articles to a unanimity requirement, authors have sought to limit its scope to contributions made to the company, or by excluding obligations conceming the structure and organisation of the company 9 If a shareholder fails to fulfil hi 6.2 Freedomto transfer shares Mandatory rules restricting the transfer of shares apply only to the bv. Unless the articles state otherwise, a shareholder is free to transfer his shares to his spouse or registered partner, to his relatives up to the second degree and to his co-shareholders All other transfers must be subject to a share transfer restriction clause(art. 2: 195 W). a shareholder who wants to transfer his shares is either obliged to obtain prior approval of a designated organ#0 of the company, or has to offer the shares to his co-shareholders first. If the approval is denied or the co-shareholders do not accept his offer, the articles may state that he has to offer the shares to other parties appointed by the designated organ. The articles may conta in a combination of the two options, e.g. for different chsses of shares 4I On the request of the offering shareholder, the buyers must pay a price determined by an independent expert. The articles may give criteria for the valuation of the shares. A shareholder is always entitled to receive the price determined by the independent expert in cash. 42 For NVs restrictions on share transfers are optional(art. 2: 87BW) Another means of restricting the transfer of shares can be created by obliging the shareholders to meet certa in requirements.43 For instance, the articles may allow a shareholder only to be a natural person, a govemment agency or a mem ber of an independent profession. The articles may also require a shareholder to own no more than x of the shares or to participate in a voting agreement Requirements may not be im posed aga inst the shareholder s will. For if the requirements are set by an 38. Handboek, o c, nr 172. Cf WESTBROEK, De nieuwste druk van het Handboek, Naamloze Vennootschap 1977, p 149. DORTMOND, Enige beschouwingen rondom aandelen, Monografieen vanwege het Van d Heijden Instituut deel 31, Deventer 1989, P 43 An organ of the company may be the shareholders meetng, a priorty shareholders meeting (see infia paragraph 6.2), the executive board, the supervisory board and the pont meeting of the executive and supervisory board, art. 2: 78a/189aBW Hoge Raad 31 December 1993, Nederlndse Junispnadentie 1994, 436( Verenigde ASSER-MAELJER, oC, nr 219 ASSER-MAELJER, O.c. nr 217
MEINEMA 10 even state that a company s organ may decide to impose additional obligations to shareholders, which have to be specifically described in the articles. 38 A shareholders agreement containing additional contributions is in itself an expression of the will of the shareholder, and would therefore be in conformity with art. 2:81/192 BW. The exact scope of art. 2:81/192 BW is not clear. Since an extensive interpretation of the obligations would subject virtually all alterations of the articles to a unanimity requirement, authors have sought to limit its scope to contributions made to the company, or by excluding obligations concerning the structure and organisation of the company.39 If a shareholder fails to fulfil his obligations, the articles may withdraw his voting rights (art. 2:118/228 BW). 6.2 Freedom to transfer shares Mandatory rules restricting the transfer of shares apply only to the BV. Unless the articles state otherwise, a shareholder is free to transfer his shares to his spouse or registered partner, to his relatives up to the second degree and to his co-shareholders. All other transfers must be subject to a share transfer restriction clause (art. 2:195 BW). A shareholder who wants to transfer his shares is either obliged to obtain prior approval of a designated organ40 of the company, or has to offer the shares to his co-shareholders first. If the approval is denied or the co-shareholders do not accept his offer, the articles may state that he has to offer the shares to other parties appointed by the designated organ. The articles may contain a combination of the two options, e.g. for different classes of shares.41 On the request of the offering shareholder, the buyers must pay a price determined by an independent expert. The articles may give criteria for the valuation of the shares. A shareholder is always entitled to receive the price determined by the independent expert in cash.42 For NVs restrictions on share transfers are optional (art. 2:87 BW). Another means of restricting the transfer of shares can be created by obliging the shareholders to meet certain requirements.43 For instance, the articles may allow a shareholder only to be a natural person, a government agency or a member of an independent profession. The articles may also require a shareholder to own no more than x % of the shares or to participate in a voting agreement. Requirements may not be imposed against the shareholder s will. For if the requirements are set by an 38. Handboek,o.c., nr. 172. 39. Cf. WESTBROEK, De nieuwste druk van het Handboek, Naamloze Vennootschap 1977, p. 149. DORTMOND, Enige beschouwingen rondom aandelen, Monografieën vanwege het Van der Heijden Instituut deel 31, Deventer 1989, p. 43. 40. An organ of the company may be the shareholders meeting, a priority shareholders meeting (see infra paragraph 6.2), the executive board, the supervisory board and the joint meeting of the executive and supervisory board, art. 2:78a/189a BW. 41. Hoge Raad 31 December 1993, Nederlandse Jurisprudentie 1994, 436 (Verenigde Bootlieden). 42. ASSER-MAEIJER, o.c., nr. 219. 43. ASSER-MAEIJER, o.c., nr. 217