Shareholder disputes

Shareholder disputes: conflicts with direct consequences for your company

A shareholder dispute is a conflict between shareholders themselves, or between shareholders and the board, that affects decision-making, the financial position, or the continuity of the company. Such conflicts almost never arise overnight. They are typically the result of changed relationships, divergent expectations regarding strategy or dividends, breaches of trust following a personal matter, or the gradual stagnation of communication between parties who once started working together with the best intentions.

The legal consequences can be far-reaching. A blockage at the general meeting can hold back an investment decision. A refused dividend distribution can put a shareholder in a financial bind. A rejected request for access to the annual accounts may indicate underlying malpractice. And a breach of the shareholders' agreement can lead to substantial fines and damage claims. Timely and careful legal assessment is essential in shareholder disputes, as the first steps often determine the subsequent course of events.

Who do we work for?

We assist both majority and minority shareholders. Our clients include director-major shareholders in SMEs, family shareholders, investors and private equity firms, certificate holders, holding structures, and shareholders in listed companies. Additionally, we advise directors involved in shareholder disputes, and STAK foundations in certificate holder disputes. Whether you are in a position where you wish to see your co-shareholder leave the company, or find yourself with your back against the wall, an early legal assessment of your position, evidence, and strategic options is crucial.

Common causes of shareholder disputes

Practice reveals a number of recurring patterns. The legal analysis and the course of action to be chosen differ depending on the type of conflict.

Stalemate or deadlock

A deadlock often arises in 50/50 ownership structures or in situations where the shareholders' agreement prescribes unanimity for certain decisions. When both shareholders remain stuck on opposing positions, the company can become operationally paralyzed. Classic solutions include a pre-agreed deadlock procedure (Russian roulette, Texas shoot-out, shotgun clause), the appointment of an independent third director, mediation, or, as a last resort, a dispute resolution or inquiry procedure.

Dispute over dividend distribution

Minority shareholders often depend on dividend payments for their return. When the majority decides year after year to reserve funds instead of distributing them, this may, under certain circumstances, be contrary to the principles of reasonableness and fairness under Article 2:8 of the Dutch Civil Code, or even lead to a judgment of mismanagement. At the same time, a dividend resolution must comply with the balance sheet and distribution test of Article 2:216 of the Dutch Civil Code, with directors' liability for the board that wrongfully approves a distribution.

Dispute regarding information and access

Shareholders are entitled to information about the company, particularly through the general meeting (Article 2:217 of the Dutch Civil Code). When the management board or the majority shareholder withholds information, this may in itself constitute grounds for an inquiry procedure or, where appropriate, for requesting access to the company's records via summary proceedings. Moreover, denied access is often a red flag for underlying problems.

Dispute regarding the appointment or dismissal of a director

The general meeting appoints and dismisses directors (Articles 2:242 and 2:244 of the Dutch Civil Code), unless otherwise provided in the articles of association. In the case of multiple shareholding, significant disagreement may arise regarding appointment or dismissal, particularly when the director is also a (co-)shareholder. In that case, a double-edged sword arises: dismissal as a director affects both the corporate law position and the employment law position (15 April 2005 judgment, Unidek/Decoster). For the director-major shareholder, the connection with the management agreement and the shareholders' agreement is also of importance.

Suspicion of mismanagement

When a shareholder has doubts about the policy pursued, a request for an inquiry may be submitted to the Enterprise Chamber. The Enterprise Chamber investigates whether there are well-founded grounds to doubt the correctness of the policy and, consequently, may take far-reaching measures, such as the suspension of directors, the appointment of a supervisory director, or the temporary transfer of shares by way of administration. The Cancun judgment (Supreme Court of the Netherlands, 4 April 2014) has further clarified the test regarding the balancing of interests by directors.

Violation of the shareholders' agreement

Shareholders' agreements typically contain provisions regarding voting conduct, non-competition, confidentiality, drag-along, tag-along, lock-up, exit, and dispute resolution. Violation often leads to contractual penalties and damage claims, but the question of whether a corporate law decision can be annulled partly on the basis of the contractual agreement is more subtle. We assess the interplay between the contractual and corporate law tracks and advise on the optimal course of action.

Dispute over valuation at exit

In the event of withdrawal, expulsion, or a buyout procedure, the valuation of shares almost always plays a central role. The law provides for expert valuation in the dispute resolution process, with the court acting as the final adjudicator. The reference date, the time of valuation, and the valuation methodology (DCF, multiples, NAV) are typically the subject of intense debate. Specific assessment criteria apply to the buyout procedure (Articles 2:92a and 2:201a of the Dutch Civil Code).

The legal framework of shareholder disputes

For shareholder disputes, Dutch law provides a number of specific instruments, in addition to the general possibilities of contract law.

The dispute resolution procedure is regulated in Articles 2:335 to 2:343c of the Dutch Civil Code. This comprises the expulsion action, by which a shareholder can be compelled to transfer their shares if their conduct harms the interests of the company to such an extent that the continuation of their shareholding cannot reasonably be tolerated (Article 2:336 of the Dutch Civil Code), and the withdrawal action, by which a shareholder can demand that their shares be taken over because their rights or interests have been harmed by the conduct of fellow shareholders to such an extent that the continuation of their shareholding can no longer be reasonably expected (Article 2:343 of the Dutch Civil Code). Since January 1, 2025, the Act on the Adjustment of the Dispute Resolution Procedure and Clarification of Admissibility Requirements for the Inquiry Procedure (Wagevoe) has entered into force, including the concentration of dispute cases at the Enterprise Chamber, broader possibilities for ancillary actions, and adjustments to the procedure.

The inquiry procedure is regulated in Article 2:344 et seq. of the Dutch Civil Code and can be initiated before the Enterprise Chamber of the Amsterdam Court of Appeal. The procedure proceeds in two phases: first, the Enterprise Chamber assesses whether well-founded grounds exist to doubt the correctness of the policy (first phase, possibly with immediate remedies), after which an investigation follows, and in the second phase it can be established that mismanagement has occurred, possibly with definitive remedies. The inquiry procedure is particularly powerful because it can be initiated quickly, can yield provisional remedies, and the process-psychological effect is usually significant.

The buyout procedure (Articles 2:92a and 2:201a of the Dutch Civil Code) offers a shareholder holding more than 95% of the issued capital the possibility to forcibly buy out the remaining shareholders. In addition, the general standards of reasonableness and fairness (Article 2:8 of the Dutch Civil Code), the possibility of annulling conflicting resolutions (Articles 2:14 and 2:15 of the Dutch Civil Code), and, for certificate holders, the separate regulations regarding voting rights and meeting rights, all play a role in every shareholder relationship.

What routes are available to resolve your shareholder dispute?

A shareholder dispute can be resolved through various avenues. The choice depends on the urgency, the parties' stance during the proceedings, the stakes, and the relative strength of the position.

Negotiation and amicable settlement

In many cases, a negotiated exit or acquisition is the fastest and most commercially advantageous route. Experience shows that parties facing the prospect of a lengthy inquiry procedure or dispute resolution still wish to reach a reasonable solution. We advise on the positioning, timing, and content of a settlement proposal, and draft settlement agreements that fully cover the tax and legal consequences.

Mediation

When parties wish to continue seeing each other (family, long-term collaboration) or when the business partnership needs to continue, mediation can be a quick and relatively inexpensive route. Mediation is particularly effective when both parties genuinely seek a solution and are willing to compromise.

Dispute resolution (Article 2:335 et seq. of the Dutch Civil Code)

The statutory dispute resolution procedure offers the possibility of an expulsion claim or a withdrawal claim. Both procedures are far-reaching and require thorough factual investigation, evidentiary position, and legal substantiation. Since the Wagevoe (effective January 1, 2025), these procedures have been concentrated at the Enterprise Chamber.

Inquiry procedure at the Enterprise Chamber

The inquiry procedure is ideally suited when serious doubts exist regarding the policy pursued and when provisional measures are desired. The Enterprise Chamber can intervene within a short period by suspending directors, appointing a supervisory director or interim director, transferring shares under a management title, or suspending decisions. These measures are generally granted only when they are necessary for the continuity of the enterprise or for the restoration of relations.

Summary proceedings and provisional measures

In acute situations, such as an upcoming general meeting where a far-reaching decision is imminent or an impending sale of vital assets, summary proceedings before the ordinary civil court can quickly provide clarity. Summary proceedings can be initiated to suspend decisions, compel the provision of information, or halt the execution of transactions.

Buyout procedure (Articles 2:92a and 2:201a of the Dutch Civil Code)

For shareholders holding more than 95% of the capital, the buyout procedure is the designated route for the compulsory purchase of remaining shareholders. The procedure is conducted by the Enterprise Chamber and has its own valuation methodology.

Substantive proceedings before the ordinary court

The ordinary civil courts generally have jurisdiction over disputes regarding the interpretation or breach of a shareholders' agreement. In these cases, penalties, claims for damages, and specific performance are sought. The choice between the corporate law and contractual tracks (or a combination) is strategic and requires thorough preparation.

Our approach to shareholder disputes

You will not receive an abstract legal narrative, but rather a practical assessment of your position, the burden of proof, the chances of success in court, and the expected cost trajectory. Where possible, we explore the amicable route, with legal clout in the background. Where necessary, we litigate firmly, paying attention to the psychology of the proceedings and the timing of every step. In every case, our legal experts look ahead: what happens if the proceedings last two years, if the opposing party dies or goes bankrupt, if the company continues to decline in value during that period, or if the Tax Authorities classify the exit differently for tax purposes than the parties had envisioned? We take these scenarios into account in advance.

Why MKBjuristen.nl?

MKBjuristen.nl has been active since 2001 and serves a broad range of clients, from owner-managers to listed companies. Our corporate law team has years of experience with shareholder disputes, dispute resolution, inquiry proceedings, and the associated interplay between contractual and employment law matters. We combine legal acumen with business insight, communicate clearly and without unnecessary legal baggage, and bill transparently. Specialist corporate legal advice and litigation starting from €155 per hour excluding VAT, with clear agreements in advance regarding scope and budget.

Shareholder disputes within corporate law

Shareholder disputes constitute a specialty within the broader field of Corporate Law. Unlike an insolvency law perspective, where the emphasis lies on recovery and directors' liability, a shareholder dispute under Corporate Law revolves around the relationships within a healthy, continuing company: control, voting ratios, governance, and the balance between majority and minority shareholders. The standards of reasonableness and fairness of Article 2:8 of the Dutch Civil Code, the dispute resolution mechanism of Article 2:335 et seq. of the Dutch Civil Code, and the inquiry procedure of Article 2:344 et seq. of the Dutch Civil Code are central here, and the outcome directly affects the continuity of the enterprise.

Moreover, in practice, a shareholder dispute is often linked to other corporate legal issues. A conflict sometimes exposes gaps in the company's corporate governance , and upon an exit, the connection with mergers and acquisitions comes into play, for example when a departing shareholder wishes to sell their stake to a third party or an investor. We therefore always place your dispute within the broader corporate legal context, ensuring that today's solution does not become tomorrow's problem.

How do you prevent a shareholder dispute?

The best shareholder dispute is the one that never arises. Many conflicts can be traced back to agreements that were not recorded, or were incompletely recorded, at the start of the partnership. A well-thought-out shareholders' agreement is therefore the most important preventative measure. In it, you stipulate how decisions are made, what happens in the event of a deadlock, how and at what valuation a shareholder may exit, and what agreements apply regarding dividends, competition, and confidentiality.

We advise on the drafting and periodic review of shareholders' agreements and articles of association, thinking ahead in the process. Crucial clauses include a deadlock provision (such as a shotgun or Russian roulette clause), drag-along and tag-along provisions, a pre-agreed valuation methodology, a good leaver/bad leaver arrangement, and a clear dispute resolution clause. Making sound agreements in advance not only saves costs but also prevents a business disagreement from escalating into a protracted legal battle. We do this for both international corporations and the two partners behind the company around the corner.

What does a shareholder dispute cost and how long does it take?

The costs and duration of a shareholder dispute vary widely and depend on the chosen route. A negotiated exit or mediation can lead to a solution within a few weeks to months at manageable costs. A dispute settlement or inquiry procedure before the Enterprise Chamber is more intensive: such proceedings require factual investigation, expert valuation, and procedural documents, and can take one to two years or longer. Summary proceedings, on the other hand, often provide a provisional decision within a few weeks when there is acute urgency.

We work transparently and make clear agreements in advance regarding scope, approach, and budget. In an initial assessment, we outline not only the legal chances but also the expected cost trajectory and turnaround time per scenario, enabling you to make an informed decision. We offer specialist corporate legal advice and litigation starting from €155 per hour excluding VAT. Our mixed teams of lawyers and in-house counsel allow for efficient allocation of work, ensuring you gain legal clout without unnecessary costs.