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If the situation between shareholders becomes unworkable, the statutory dispute resolution mechanism offers a solution: a shareholder can be expelled by the court (Article 2:336 of the Dutch Civil Code) or withdraw voluntarily (Article 2:343 of the Dutch Civil Code). In the event of mismanagement, an inquiry by the Enterprise Chamber is also possible.
When does this take place?
Shareholders may clash over the company's direction, dividend policy, or control. Small shareholders sometimes feel ignored, while large shareholders feel hindered. If the situation becomes unworkable, the statutory dispute resolution mechanism can offer a way out if the parties are unable to reach an agreement among themselves.
Expulsion: forcing a shareholder to leave
If a shareholder harms the interests of the company through his conduct to such an extent that his continued shareholding cannot be tolerated, the court may compel him to transfer his shares (expulsion, Article 2:336 of the Dutch Civil Code). It is a severe measure with strict conditions.
Withdrawal: being able to leave voluntarily under duress
If a shareholder's interests are so harmed by the conduct of fellow shareholders that he cannot reasonably be expected to remain, he may demand that his shares be taken over (withdrawal, Article 2:343 of the Dutch Civil Code). In this way, a shareholder who is trapped can still get out.
The survey procedure
In the event of well-founded doubt regarding sound policy, a shareholder may, subject to conditions, request an inquiry from the Enterprise Chamber (Article 2:345 of the Dutch Civil Code). The Enterprise Chamber may order an investigation and take far-reaching measures. Often, the mere threat thereof acts as a means of pressure.
Frequently Asked Questions
Can I force a co-shareholder to leave?
Under strict conditions via expulsion (Article 2:336 of the Dutch Civil Code), if his conduct seriously harms the interests of the company.
Can I be forced to leave the company myself?
Yes, via withdrawal (Article 2:343 of the Dutch Civil Code), if you are harmed by co-shareholders to such an extent that remaining cannot be expected of you.
What is a survey?
An investigation by the Enterprise Chamber in case of doubt regarding sound policy (Article 2:345 of the Dutch Civil Code), which may also order remedies.
Resolving a shareholder conflict?
Our lawyers and legal experts advise and litigate, and prevent many conflicts with a good shareholders' agreement. View our corporate lawteam or schedule a free consultation.
