A Dutch private limited company can make distributions of profits to its shareholders if the company's capital exceeds the aggregate of the reserves that must be maintained pursuant to the law and the company's articles of association. If a company cannot pay its due and payable debts after a distribution, the members of the board of directors can be held liable to for any resulting shortfall and the company's bankruptcy trustee can claim and recover the amount wrongfully paid from each shareholder.
The House of Representatives recently voted in favour of the Court Approval of a Private Composition (Prevention of Insolvency) Act (WHOA). Inspired by the UK scheme of arrangement and US Chapter 11 proceedings, the WHOA will introduce to the Netherlands a legal framework that enables debtors to restructure their debts outside formal insolvency proceedings by means of a court-approved restructuring plan.
The international trade chamber of the Amsterdam District Court – known as the Netherlands Commercial Court (NCC) and the Netherlands Commercial Court of Appeal (NCCA) – allows parties to resolve international civil or commercial disputes and litigate in the English language, both in first instance (NCC) and appeal (NCCA). Depending on the circumstances of the case, the NCC and the NCCA may be attractive alternative forums to regular district courts, arbitration institutes and international commercial courts.
The Supreme Court recently clarified the scope of shareholders' rights under the Civil Code with regard to (non-binding) voting items on general meeting agendas. Under Dutch corporate law, shareholders have the right to request the board of directors of a public or private limited company to put an item on the agenda of a shareholders' meeting if the threshold and timing requirements are met. Such requests may be refused by the board of directors only in exceptional circumstances.
Unlike in many other jurisdictions, it is possible under Dutch corporate law for a foreign legal entity to be appointed as a statutory director of a Dutch legal entity. Therefore, a natural person can act as a director of a legal entity which in turn acts as a director of another company. A number of Supreme Court cases have examined whether it is possible for an ultimate director to limit his or her liability by way of a foreign legal entity director.