The Netherlands is amending the rules that govern Dutch
limited companies (besloten vennootschappen). The aim
is to have more flexible rules, in line with today's practice.
The reform will take place in three different stages. In March
2005, Dutch practitioners handed in their points of view on the
first consultation document, which was distributed by the
Ministry of Justice.
This document proposes to allow Dutch limited companies to
determine in their articles of association whether the holders
of depository receipts for registered shares have the right to
attend the general meeting of shareholders. However, once a
right has been included in the articles, it would no be longer
possible to reverse this. This right falls within a grey area
of law and the proposal provides clarification on this
Furthermore, the document proposes that clear and direct
instructions be given to the managing board by the general
meeting, or, if applicable, the supervisory board. The managing
board is nevertheless given an escape route from these
instructions if they are deemed contrary to the interest of the
company (or the group to which it belongs) or its enterprise.
It seems desirable, especially when considering larger group
structures, for the future law to only provide the managing
board with limited possibilities to do so.
Unfortunately, this proposal (and the current law) does not
contain any provisions on the possibility of having non-voting
shares. Their existence is desirable, as one would no longer
need to deal with the complicated structure of depository
receipts for shares to achieve this effect.
The Ministry of Justice is reviewing the various
practitioners' points of view and draft legislation is being
Arnout Stroeve and Evelien Visser