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Corporate law

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Welcome to Penrose Corporate Law

Penrose is specialised in the field of Dutch Corporate Law. We advise and assist entrepreneurs, directors, and shareholders in the drafting of contracts, in company takeovers and joint ventures, and in the decision-making process. We also serve as counsel in conflicts involving shareholders and directors or between companies. Some of the corporate law issues and situations that we encounter on a daily basis are outlined below.

More information about Penrose and its approach to Dutch corporate law can be found here

Mergers and Acquisitions (M&A)

The sale of a company is often executed in accordance with a procedure that has evolved in the legal profession. Agreements, such as a Non-disclosure agreement (NDA), a Letter of Intent (LOI) or a Sales and Purchase Agreement (SPA), as well as due diligence arrangements and matters raised in contract negotiations will depend on the nature of the business and the preferred acquisition structure. The type of transaction (assets/liabilities sale or a sale and transfer of shares), the warranties, indemnities and securities required by the purchaser will ultimately determine the content of the assets-liabilities or Share Purchase Agreement.

Investors and Shareholders

The shareholders of a company or indeed the investors (e.g. private equity or venture capital investors) will often demand clear participation conditions as well as a shareholders’ agreement. Such agreements are essential in order to guarantee a good allocation of roles within the company and safeguarding of each party’s interests. Which decisions of the management board need to be approved under Dutch law first of all by the shareholders? What are the rights of the priority shareholders in the Netherlands? How will the benefits package turn out? Bad leaver, good leaver, drag along, tag along: all such issues call for careful planning if dealing with an exit, shareholder disputes or underperformance.

The Board, General Meeting of Shareholders and Supervisory Board

A company is subject to the decisions of the board of directors, the general meeting of shareholders and (at times) the Supervisory Board (SB) or, alternatively, the non-executive board. The general Netherlands law allocation of duties and competency limits can give rise to many misunderstandings and problems. Aside from the law, provisions in the Articles of Association, a shareholders’ agreement or for example board regulations can be a good starting point. The decision-making process within the management board or the general shareholders’ meeting will be subject to strict formal requirements in the Netherlands. If these requirements are not met, the decision could be contestable or adversely affected to the extent that it will become inoperable.

Executive director’s liability, bankruptcy

More and more, we see executive board members in the Netherlands being held personally liable. On the one hand, this can present opportunities for creditors. On the other hand, directors on the board are becoming more and more aware of how one needs to safeguard against personal liability. In general, holding an executive director personally liable can be difficult but if it comes to this, there may be drastic consequences. Particularly if the company has become bankrupt. In the case of bankruptcy, the executive director may even be held liable sometimes for the entire (residual) debt of the bankrupt company.

Business disputes within the company

Increasingly, executive directors, shareholders and the works council find themselves locked in legal proceedings in the Netherlands. For their part, shareholders may feel they have no other option in challenging the status quo but to institute inquiry proceedings or to enforce a share transfer. In Dutch business law, a number of options can be availed of to institute legal proceedings (supplementary to exercising the rights under a shareholders’ agreement) when dealing with an undesirable situation and searching for a solution. Conflict situations of this kind often lead to a settlement agreement resulting in a shareholder’s disposing of its shares.

Financing and securities

A company that wants to attract money (for example for a company acquisition usually does this by means of a share issue (equity capital), a bank loan, a bond issue (loan capital) or a mix of these. Even crowdfunding for companies is on the rise. The loan provider or bondholder usually seeks to have securities in place in case the loan cannot be repaid (e.g. in case of a deferment of payment or bankruptcy). Such securities may include a share pledge, pledge of movable assets, pledge of financial assets, surety and mortgage.

The important thing for the board of the company is to make sure when concluding Dutch finance agreements that the interests of the company are properly safeguarded and that other creditors are not disadvantaged, in order to avoid personal liability. Sound board resolutions of the company are a must. Moreover, the approval of shareholders or other creditors may be required when trying to raise funding or for the provision of securities.

Dutch Corporate law specialists

Penrose has a team of lawyers in the Netherlands that specialise in Dutch Business law and Corporate law. They can provide advice regarding the sale or purchase of a company in the Netherlands. Please do not hesitate to contact us.

Hans Klaver portret
Attorney at law, Partner
Attorney at law, Partner
Thomas Schutte portret
Attorney at law
Jacobine van der klooster profielfoto rond
Attorney at law
Liza Sol portret
Attorney at law
Frans Beishuizen portret
Attorney at law, Partner
Profielfoto rond Sophie
Attorney at law

Corporate Law