Conflicts between shareholders
Written by:
Marcel van den Ende
A dispute between shareholders is often like a peat fire. For a long time it lies dormant under the ground, but when it flares up everything is on fire. We regularly experience that when the management or an individual shareholder comes to us, there is already an untenable situation. The jointly established Dutch limited liability company is now unmanageable. The various parties involved in the conflict are blocking each other's solutions. Something has to be done, otherwise the downfall of the company threatens. Fortunately, Netherlands company law offers solutions here. And we can help you with that.
A Deadlock
A well-known example of a shareholder dispute is the "deadlock", a stalemate that occurs, for example, when two shareholders or two groups of shareholders each hold 50% of the shares. They both have the same voting right and cannot work it out together. A variant to this is that for certain decisions a qualified majority is required and that the groups of shareholders do not help each other with such a majority, while the decision is nevertheless necessary.
A shareholder dispute often has a major impact not only on the shareholders involved, but also on the company and its business. So there is always a lot at stake.
The minority shareholder
But disputes can also arise in a perfectly manageable company where the majority shareholder has everything to say. The minority shareholder once enthusiastically stepped in, but notices that everything is being done to smoke him out, for example through a change in the dividend policy and by charging all sorts of fees to the company, so that returns collapse. Requests for information are invariably ignored.
Shareholders Agreement
The Shareholders Agreement can be helpful, but also a source of conflict. Nevertheless, when setting up a joint venture, it is wise to record the agreements between the shareholders in a Shareholders Agreement. Agreements can be laid down in the Shareholders Agreement, among other things, about how to act when the company is sold, the distribution of profits, the making of investments and the exercise of voting rights. A good Shareholders Agreement can prevent problems and at least offer solutions.
Dispute Resolution
Various options have been included in Dutch company law to find a solution in such cases. Depending on the nature of the dispute, the case can be referred to the Enterprise Division of the Amsterdam Court of Appeal or the ordinary court.
Further information
If you would like to discuss a situation with a lawyer who knows about corporate law, you can of course contact us. It is not without reason that our motto is "Your problem, our concern."
More information?
Marcel van den Ende will gladly help you further.
