News & Insights
COVID-19 update: New emergency law allowing companies to hold general meetings via online means is to take effect soon
The House of Representatives of the Netherlands has recently received a new COVID-19 related bill allowing electronic means to be used for decision-making purposes during the corona crisis. The bill is likely to take effect this month but it is expected that it will cover things retrospectively.
The bill allows Dutch legal entities to hold general meeting using electronic means, that is, attendance will be possible by joining a video or audio conference. Questions may be submitted no later than 72 hours prior to and during the meeting, and voting should be carried out before the meeting. Where a general meeting has been already convened (to take form in a physical or hybrid format), the bill will make it possible to change the form of venue to a virtual meeting by providing at least a 48-hour notice. In such a case, questions can be submitted up to 36 hours prior to the meeting.
In this respect it is important that regardless of what general meeting set-up is set out in entity’s founding documents (eg articles of association), the bill will ultimately enable it to hold a virtual general meeting.
Furthermore, the new measure will also allow notaries to execute a deed with the signatory present via a video link.
For more information, see (in Dutch only): link.
Do you have a Dutch BV and are wondering how the corona crisis might affect the entity’s ability to perform its legal obligations? STRIK Attorneys at Law and Tax Advisors is a boutique, multilingual law firm that advises on matters of Dutch corporate and tax law and is happy to assist its clients in navigating legal landscape in the Netherlands currently affected by COVID-19.
Dutch Chamber of Commerce (KvK) launches support resource for companies and entrepreneurs affected by Corona Virus
Due to unfolding uncertainty resulting from the outbreak of Covid-19, or Corona Virus, the Chamber of Commerce of the Netherlands (Kamer van Koophandel) has launched a dedicated resource to help affected organizations and entrepreneurs to navigate the corporate challenges posed by the virus. The resource accumulates important information and links to government institutions that can help owners, executives and entrepreneurs to deal with the following issues:
– reduction of workload for staff and personnel;
– reduction of workload for private entrepreneurs;
– potential tax issues resulting from decreased profits because of the Corona Virus;
– working from home and duties of the employer during the crisis situations;
– what to do if you need to organize a mass event or a meeting, or travel abroad for business;
– potential bankruptcy as a result of the Corona Virus crisis.
For more information see (in Dutch only): https://ondernemersplein.kvk.nl/het-coronavirus-en-ondernemen-een-wegwijzer/
Do you consider registering a company in the Netherlands? Or do you already have one and need to introduce changes to its structure, corporate documentation, or composition of its board? STRIK Attorneys at Law and Tax Advisors is a boutique, multilingual law firm that advises on matters of Dutch corporate law and is happy to assist both individual and corporate clients in registering, maintaining or liquidating an entity incorporated in the Netherlands.
Recent Dutch court judgement on drag-along provisions: a case of organic food retailer
Similarly to other jurisdictions, Dutch shareholders agreements typically include exit mechanism provisions, including the so-called ‘drag-along’ and ‘along-along’ rights. In a nutshell, a drag-along right enables a majority shareholder to force a minority shareholder to join in the sale of a company. The majority owner doing the ‘dragging’ must give the minority shareholder the same price, terms, and conditions as any other seller. By the same token, tag along rights, being the inverse of drag along rights, can be exercised when a majority shareholder sells their shares, thus enabling a minority shareholder to participate in the sale at the same time for the same price for the shares.
One of the most recent Dutch cases relating to an exercise of the so-called ‘drag-along right’ concerns a niche organic food retailer, Marqt, whose shops could be seen on highstreets in all major Dutch cities.
As the time of financial hurdles, the founders and minority shareholders of Marqt opposed the exercise of the ‘drag-along right’ by the majority shareholders citing they needed more time for finalize the sale they were working on at their end.
Having considered all the circumstances in the case, the Dutch court ultimately ruled that exercise of the ‘drag-along right’ by the majority shareholders justified full compliance with the relevant shareholders agreements.
A full text of the judgement (in Dutch only) is available here.
Are you a founder or investor and interested to learn more how to best structure a shareholders agreement to protect your best interests? STRIK Attorneys at Law and Tax Advisors is a boutique, multilingual law firm that advises on matters of Dutch corporate law and is happy to assist both individual and corporate clients.