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 personalityMANDATORY 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 vennoot￾schap) 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