Penrose Dutch corporate law attorneys
Penrose is a law firm specialising in Dutch corporate law. Our corporate lawyers advise and assist entrepreneurs, investors, directors and shareholders in Dutch corporate law matters including mergers and acquisitions (M&A), shareholder agreements, shareholder rights, shareholder meetings, financing and securities and the internal corporate decision-making.
We also advise and assist in corporate disputes, such as conflicts with or between shareholders, directors’ liability, inquiry proceedings or post-M&A disputes (concerning, for example, a breach of warranties or indemnities).
On this page, we will elaborate on a number of corporate law topics and situations we are involved in on a daily basis, and introduce our Dutch corporate lawyers to you. You will also find links to recent reads on relevant corporate law topics published on our website.
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M&A (mergers and acquisitions)
Our Dutch corporate lawyers specialise in M&A (mergers and acquisitions). The sale of a company under Dutch law generally follows a transaction process that has been developed in the legal profession internationally and that practice is also adopted in the Netherlands. Agreements, such as a Non-Disclosure Agreement (NDA), a Letter of Intent (LOI), or a Sales and Purchase Agreement (SPA), due diligence and contracting will depend on the nature of the business, the preferred acquisition structure and whether Dutch law applies. The type of transaction (assets / liabilities sale or a sale and transfer of shares) and the warranties, indemnities and securities for the purchaser will ultimately determine the contents of the Asset Purchase Agreement (APA) or Share Purchase Agreement under Dutch law.
Shareholders’ Agreement
Our corporate lawyers specialise in drafting and reviewing shareholder agreements under Dutch law. Shareholders, investors (such as private equity or venture capital investors) of a company often require clear participation terms and a shareholders’ agreement. Such agreements are essential for a proper allocation of powers and roles within the company and the protection of each party’s interests under Dutch law. Which decisions of the board must first be approved by the shareholders? What are the rights of priority shareholders under Dutch law? What does the distribution waterfall look like? Bad leaver, good leaver, drag along, tag along: all topics that need to be regulated pursuant to Dutch law to provide guidance in the event of an exit, shareholder disputes or underperformance by the board.
Shareholder rights
Our corporate lawyers specialise in shareholder rights under Dutch law. We advise and support founders, investors, majority shareholders, and minority shareholders in protecting their position and influence within a Dutch law company. The rights of shareholders, particularly in the case of minority shareholders, are only very limitedly provided for by the Dutch Civil Code. Often, the rights of shareholders are supplemented by a shareholders’ agreement. This can be agreed upon at the incorporation of the company by the founders, but it often also happens at a later stage when a new shareholder or investor joins.
Executives, non-executives and shareholders
Our Dutch corporate lawyers specialise in the rights and duties of directors (the executives), supervisory directors (the non-executives) and shareholders. In a company governed by Dutch law, the board of directors, the general meeting of shareholders (GMS), and (sometimes) the supervisory board (SB) each have their own role and responsibility in directing and ensuring the functioning of the company. The allocation of powers and responsibilities, however, causes issues in practice. Besides the Dutch civil code, statutory provisions, a shareholders’ agreement or, for example, board regulations, provide guidance. Strict formal requirements apply to decision-making within the board or the shareholders’ meeting. If these requirements are not followed, the result may be that the resolution is questionable or never existed at all.
Directors’ liability
Our corporate lawyers specialise in the liability of directors (executives) and supervisory directors (non-executives) under Dutch law. It has become a common legal practice in the Netherlands for members of the board to be held personally liable for decisions or actions of the Dutch company. On the one hand, this can provide opportunities for creditors of a Dutch company. On the other hand, directors are increasingly becoming aware of how they must defend themselves against the risk of personal liability. Generally, it is difficult to hold a director personally liable under Dutch law. However, if successful, the consequences of directors’ liability are severe. This is particularly true when the company has been declared bankrupt. In the event of insolvency, the director may even be held liable for the entire (residual) debt of the Dutch bankrupt company. A strong defense against directors’ liability is of importance.
Corporate litigation and shareholder disputes
Our corporate lawyers specialise in Dutch corporate litigation and shareholder disputes. It is becoming more common in the Netherlands that executive directors, shareholders and the works council (ondernemingsraad) are involved in legal proceedings. Dutch corporate law offers a number of possibilities to break through conflict situations and start legal proceedings utilizing the possibilities under Dutch corporate law (supplementary to exercising rights under the shareholders agreement). Examples of shareholder disputes include the inquiry procedure (to break a deadlock situation) or the dispute resolution process involving a compulsory buy-out or exit procedure. However, when a shareholders’ agreement pursuant to Dutch law is applicable, conflicts with shareholders can take many different forms.
Financing and securities
Our Dutch corporate lawyers specialise in financing and securities. A company seeking to raise financing for an acquisition, for example, usually does so with a share issue (equity), a bank loan or bonds (debt) or mixed forms. The loan provider or bondholder usually seeks to have securities in place for the event that the loan is not (timely) repaid, especially in the event of suspension of payments or bankruptcy under Dutch law, where securities under Dutch law such as mortgage and pledge should have priority over other (subordinated) creditors. It is important for the board of a Dutch company to ensure that the interests of the company are properly protected when entering into finance agreements and to safeguard that other creditors are not being disadvantaged, in order to avoid directors’ liability under Dutch law. In addition, the approval of shareholders or other creditors may be required in connection with raising new funding or issuing securities.
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The Dutch law LOI, term sheet, MOU (or even more names for the same instrument)?
The letter of intent (LOI) is an indispensable instrument in Dutch law M&A transactions. As a Dutch corporate lawyer,
