NETHERLANDS LAW AND PRACTICE Contributed by: Friederike Henke, Ingrid Cools, Philip ter Burg, IJsbrand Uljée, Suzan van de Kam and Epke Spijkerman, BUREN
who is/are responsible for the day-to-day affairs of the CV. 3.5 Directors’, Officers’ and Shareholders’ Liability A distinction should be made between the inter - nal and external liability of managing directors: internal liability exists towards the company, while external liability exists towards third par - ties, such as creditors of the company or the tax authorities. As a general rule, managing directors are jointly and severally liable for mismanagement only in cases of serious culpability ( ernstig verwijt ). Mismanagement can consist of acting (or failing to act) in violation of the law or the articles of association, or acting in a clearly unreasonable way. Managing directors who enter into a contract on behalf of a company while knowing (or hav - ing reason to know) that the company will not be able to fulfil its contractual obligations or will not have sufficient assets against which to take recourse may be held liable (externally) for any resulting damages. The burden of proof rests with the prejudiced creditor. As a general rule, shareholders are not person - ally liable for acts performed in the name of the company, and are under no obligation to con - tribute to the losses of the company in excess of the amount to be paid on their shares. How - ever, Dutch case law has recognised that there may be exceptional circumstances that allow the “corporate veil” to be lifted and shareholders to be held jointly liable for the company’s debts and obligations.
Partners in VOFs are jointly and severally liable for all obligations of the partnership. The liability of general partners in a CV is unlimited, while the liability of limited partners is limited to the amount of their capital contributions, provided they have not performed any acts of manage - ment or representation of the partnership. 4. Employment Law 4.1 Nature of Applicable Regulations The legal framework governing employment con - tracts is set out in the Dutch Civil Code (DCC). Additional terms and conditions may be agreed in an individual employment contract, provided they do not contradict the mandatory statutory provisions of the DCC. Furthermore, the legal relationship between an employer and employee may be governed by collective labour agree - ments between the trade unions and employers (or organisations of employers). Multiple other laws and regulations are also of influence – eg, the Equal Treatment Act. In addition, case law, especially rulings of the High Court, provides an important series of precedents and principles, which often help to clarify ambiguous statutory or contractual provi - sions. The laws of the European Community and other international treaties and regulations form another important source of law. 4.2 Characteristics of Employment Contracts Dutch employment law does not require employ - ment contracts to be made in writing. Certain provisions, however, need to be in writing to be valid, such as non-competition clauses or probation period clauses. Therefore, in practice employment agreement are concluded in writ - ing.
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