NETHERLANDS Law and Practice Contributed by: Bastiaan Cornelisse, Bastiaan Kemp, Michel van Agt and Philippe Hezer, Loyens & Loeff
Both the BV and the NV allow for certain deviations to the above in their articles of association. Among other things, the BV allows for pre-emptive rights to be excluded entirely through the articles of association. 3.2 Share Transfers A transfer or disposal of registered shares requires a private notarial deed, and is typically subject to certain transfer restrictions set out in the company’s articles of association. Listed shares that are traded can typi- cally be freely transferred via a securities account kept by an intermediary. 3.3 Security Over Shares Under Dutch law, shareholders are entitled to pledge their shares, subject to any restrictions set out in the articles of association. 3.4 Disclosure of Interests Shareholders owning 3% or more of the issued capi- tal of a listed company must report this to the Dutch Authority for the Financial Markets (AFM). Such dis- closure must be made without delay as soon as this threshold is reached or exceeded. Further disclosure must be made as soon as the shareholder’s position reaches, exceeds or falls below the thresholds of 3%, 5%, 10%, 15%, 20%, 25%, 30%, 40%, 50%, 60%, 75% or 95%. Moreover, pursuant to the Dutch Corporate Govern- ance Code, shareholders engaging with the company outside of the context of a general meeting may be required to disclose their holdings to the company upon request. The above disclosure requirements do not apply to privately held companies. In such cases, only wholly owned companies are required to register their sole shareholder. There is also Dutch legislation on a reg- ister of ultimate beneficial owners. 4. Cancellation and Buybacks of Shares 4.1 Cancellation Shares can be cancelled after their issuance. Such cancellation requires the consent of the relevant
shareholders, unless the company’s articles of associ- ation specifically provide for such cancellation against repayment. 4.2 Buybacks A BV can buy back shares if and insofar as the total equity, minus the acquisition price, exceeds the reserves required by law or under the articles of asso- ciation. The board will not approve such buyback if it knows or should reasonably foresee that the company will not be able to continue paying its debts as and when they fall due after the buyback. An NV can buy back shares if and insofar as the total equity, minus the acquisition price, is more than the paid-up and called-up part of the capital plus statu- tory reserves. By law, as a starting point, shareholders are entitled to all profits of the company as established in the latest adopted annual accounts. However, in practice it is common for the articles of association to provide that the board allocates profits, allowing for all or part of the profits to be reserved and the remainder (if any) to be distributed. Typically, such allocation is based on the latest adopted annual accounts. Dividend distributions are subject to a shareholder vote and certain legal requirements. • For an NV, the general meeting may resolve to dis- tribute dividends if and insofar as the total equity exceeds the paid-up share capital plus statutory reserves. • For a BV, the general meeting may resolve to make distributions to the extent that the amount of the total equity exceeds the reserves that must be maintained pursuant to the law or the articles. Such a shareholder resolution is subject to board approval, which can only be withheld if the board knows or should reasonably foresee that the BV will not be able to continue paying its debts as and when they fall due as a result of such distribution. 5. Dividends 5.1 Payments of Dividends
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