The Articles of Association in the Netherlands are important documents that govern the functioning of the company. Our lawyers in the Netherlands can help you draw up the company’s Articles of Association and know more about the Dutch company law.
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Articles of Association and the types of Dutch companies
When opening a company in the Netherlands, investors must choose the appropriate type of company to incorporate. Private limited liability companies (BV) and public limited companies (NV) in the Netherlands need to execute and file deeds of incorporation. This deed contains important information about the company Below, we present a list of the details or information included in the Articles of Association:
- The name of the company: included in the Articles of Association is the name of the new corporation, its type (and the abbreviation) as well as the location of its official seat.
- The company objectives: the primary objective and any secondary one, as applicable; they do not need to be descried in detail.
- Shares: the Articles will include information about the types of shares, their value and how or if they are transferable. The value of the share capital is also included in the Articles.
- Managerial structure: the Articles include information about the management of the company, the governing bodies and the name or the names of the managing director or directors.
- Member admission: the Articles present the manner in which new members can be admitted into the company (if applicable) and the situation in which the membership ends.
The Articles of Association can also include information about the manner in which the company will observe the annual reporting and accounting principles. This is a matter that is addressed by all companies in the Netherland, whether or not they are considered resident or non-resident companies. the Executive Board can, as per the Articles, be entrusted with keeping the adequate records as well as submitting the annual report, with the approval from the other relevant corporate bodies. For some companies, the Articles may provide for the possibility to appoint a separate, financial committee for the purpose of auditing the statements.
The Dutch company’s Articles of Association will typically include information about how the constitutive documents can be amended. These can, in most cases, be completed as amended as needed through a resolution of the General Assembly which is convened specifically for this purpose. the resolution must be voted by a certain percentage of shareholders.
The manner in which the company can be wound up is also included in the Articles. This is an important clause in the Articles, as the process is most likely subject to several stages, during which, when needed, the accountants at our law firm in the Netherlands can assist you. For example, the resolution to wind up the company can require at least two-thirds of the votes, when at least two-thirds of the Members are present or represented in that meeting. The actual liquidation phase can be directed to he handled by the Executive Board.
The Articles are to be drafted in Dutch and, when the branch also submits enclosed documents, they are to be translated. The Articles of Association of a Dutch company are one of the documents about that legal entity that can be made publicly available. In this respect, the company members or shareholders should be well aware that their identities will be made public.
Can the articles contain specific company information?
The Articles of Association can be viewed as the company’s constitution: a document that defines the purpose of the company, the kind of business it will develop, the duties and responsibilities of its directors and the powers that lay in the hands of the company’s shareholders.
Apart from the basic information included in the Articles of Association, as listed above, the Articles can also contain special provisions, according to the type of company. For example, branches in the Netherlands will also need to have this incorporation document drawn up and it will also highlight the relationship and the dependency on the parent company abroad. A branch’s Articles can include clauses for the decision making process, such as the manner in which the Executive Committee and the other bodies convene on a yearly basis. Typically, there are clauses for the decision making process of all of the governing bodies.
The Articles of Association can also contain the by-laws of the company (the rules by which the company organizes itself), various internal regulations and many administrative issues. The Articles of Association can be amended following a proposal made by the Management Board that was previously approved by the Supervisory Board. The General Meeting of Shareholders decides to apply an amendment if it is approved by a majority of votes.
Are the Articles of Association the only documents used to incorporate a Dutch company?
In large companies, such as the NV in the Netherlands, the Articles of Association can also be accompanied by other documents, such as a shareholder’s agreement. This is used in order to clarify or further structure the relationship between the company’s shareholders. It can also include the provisions for arbitration in case of shareholder disputes. Our team of Dutch lawyers can provide company owners with complete information on the shareholder agreement and its use. We can also offer specialized dispute resolution services.
When opening a company in the Netherlands, the Articles of Association and the other agreements are the ones formally used for company incorporation purposes. Of course, they are accompanied by the filled in form for company registration and by copies of the founder’s identification documents. Our lawyers in the Netherlands can give you a complete list of the documents needed to register a Dutch company.
The Articles of Association of a Dutch company include the most important rules that govern a company, apart from the general ones that a legal entity is expected to observe as per the relevant local corporate and business laws. It can be accompanied by other agreements, typically the shareholder’s agreement and entrepreneurs can request specialized legal aid to draw them up, from our team of attorneys in the Netherlands. Requesting specialized legal aid is recommended for the purpose of drawing up a set of Articles that observes the current corporate rules and handle any particular issues that need to be included, as per the specific characteristics of the company that is being incorporated.