Management in the Netherlands

Within Dutch company law, there are some important regulations regarding the director of a company, which we will explain in more detail in this blog. Although UK and Dutch company law are similar in many respects, there are important differences, especially with regard to the management, which should be considered in the Netherlands. Our Dutch attorneys will gladly summarize the legal position of the managing director in the Netherlands using the example of the B.V. (besloten vennootschap).

Establishing a Dutch BV in the Netherlands

The Dutch B.V. can be roughly compared with the German GmbH or UK LLP. In the B.V. the partners have limited liability just as in the GmbH. In our article “Company Law in the Netherlands” you can read more about the Dutch B.V. and how it can be distinguished from other Dutch company forms.

The external representation in the Netherlands

In the Netherlands, if there are several directors registered in the Dutch Commercial Register, each director may in principle represent the company independently. This means that the external representation of the company does not necessarily provide for joint representation, which is why the actions of several directors are somewhat more flexible in the Netherlands than in other countries. The disadvantage of independent representation, however, is that the managing directors do not always have to consult with each other before an external decision is made, so that individual decisions are attributed to the other managing directors, even if they have not previously agreed to them.

The general meeting of shareholders in the Netherlands

As in the UK, the body of the general meeting of shareholders in the Netherlands plays a major role in the Netherlands. The managing director of a Dutch B.V. is entitled to call the general meeting of shareholders. The shareholders’ meeting is the body that appoints the managing director. In general, however, it is important to note that in the Netherlands a legal entity can also be the managing director of a B.V., whereas in other jursidictions only natural persons (and therefore no companies) can be appointed as managing director. In the Netherlands it is even often the case that a legal person is the managing director of a B.V. For more information on shareholders’ meetings under Dutch law, you are welcome to have a look at our blog, which contains further features about this important body in Dutch company law. It is also possible in the Netherlands that foreign persons can be appointed as directors of a Dutch B.V. So even if you live outside of the Netherlands, you can still become a director of a Dutch B.V.

Power of instruction of the general meeting of shareholders in the Netherlands

In the Dutch legal system the power of the general meeting of shareholders is to issue instructions. In other jurisdictions, the managing director of a GmbH is usually strictly bound by the instructions of the shareholders’ meeting. He is therefore restricted in his activities and may not disregard the instructions of the general meeting. The Dutch B.V., on the other hand, gives the managing director more freedom. The authority of the general meeting is therefore less strict under Dutch law than other jurisdictions, which is why a managing director also has more freedom to carry out his activities under Dutch law.

The liability of the managing director under Dutch law

With regard to the liability of the managing director under Dutch law, there are also some differences to company law in other jurisdictions. Important differences here are, for example, the role of the managing director in the event of the company’s insolvency and the lack of discharge from liability if an instruction from the shareholders’ meeting is not complied with. Our attorneys have summarised the most important elements of directors’ liability in the Netherlands in another blog.

It is therefore clear that management in the Netherlands differs in some areas. When setting up a B.V., you should therefore be aware of these differences or contact our English-speaking attorneys at MAAK who can advise and support you in setting up the company or in disputes within the company.

Dutch attorney specialised in company law

Do you have any questions about Dutch company law or do you need specific legal advice in Holland on how to conduct business under Dutch law? Our experienced English-speaking specialist attorneys in Holland will be happy to help you.