Forms of Business Organisation

The two most common forms of company structure in the Netherlands are the privately owned company (besloten vennootschap – BV) and the public company or corporation (naamloze vennootschap – NV). BVs are the most common form of commercial enterprise in the Netherlands and the form most frequently used by foreigners. Like the British plc or the German GmbH, the liability of shareholders in a BV is limited to their paid-up capital contributions. A BV is an independent legal entity that may enter into contracts, sue and be sued. Shares may be transferred but only under conditions set out in the articles of association. Shares may not be offered for public subscription or trading. Firms that want to raise capital publicly must adopt the NV form.

The requirements of a BV and NV are:

Capital

Minimum paid-up capital and minimum authorised capital are €18,000 for a BV and €45,000 for an NV. Authorised capital must be paid up to at least the legal minimum; 20% of authorised capital must be issued. For a BV and an NV, at least the minimum of issued capital must be paid up on formation. Capital may be supplied in cash or in kind.

Founders & Shareholders

Only one founder is required; it is also possible to have one shareholder after formation of the company. There are no nationality or residency requirements.

Board of Directors

In both BV and NV firms, the managing directors need not be Dutch nationals or residents. They need not be shareholders in the company. Banks and insurance firms must have one board member with Dutch banking or insurance experience. A corporate body may act as a managing director.

Management

Dutch law is flexible, with each company allowed to adopt whatever management structure suits its operation. This usually includes a management board, a shareholders’ committee made up of priority shareholders and a works council. There are no restrictions on nationality or numbers, although the statutes usually stipulate these. The shareholders and, if applicable, the supervisory board appoint the managing directors of the board. Foreign-controlled firms retain the right to appoint management.

A supervisory board is sometimes added but is not obligatory unless the company is an SV (structuur vennootschap). An SV is a large enterprise with more than €11.3m in issued capital and reserves and with more than 100 employees in the Netherlands. Management resolutions on important matters require approval by this supervisory board.

Companies with more than 50 workers must have a properly constituted works council. Its representatives are entitled to participate in discussions and to give advice on important company matters, which might include proposed mergers and acquisitions, mass dismissals and company closings.