Information rights of (foreign) shareholders under Dutch law
Minority shareholders in Dutch private companies (besloten vennootschappen, or B.V.’s) regularly ask whether they have a right to information from the company’s management board. This question often arises in situations where a majority shareholder also serves as the company’s director, creating potential information asymmetries.
The statutory framework
Under Dutch law, the management board is obligated to provide the general meeting of shareholders with all requested information, unless a compelling interest of the company opposes disclosure. This concerns both financial and operational information (article 2:217 of the Dutch Civil Code).
The Dutch Supreme Court has clarified that “general meeting” in this context refers to the general meeting as a corporate body. Consequently, individual shareholders do not, in principle, have a right to information outside the formal meeting context. While this ruling concerned a listed company, it remains unclear whether the same principle applies equally to private companies (B.V.’s).
The duty of care as an exception
Both the company and its directors and shareholders are subject to a statutory duty to act towards each other in accordance with the principles of reasonableness and fairness. This duty can, under special circumstances, give individual (minority) shareholders a right to information even outside the general meeting.
Courts do not grant such claims lightly. The individual (minority) shareholder must demonstrate special circumstances that justify the information request.
Special right to information
In special inquiry proceedings before the Dutch Enterprise Chamber of the Amsterdam Court of Appeal in the Cancun Holding case, courts have recognized a special duty of care in specific situations. Where a management board consists of two parties who are also shareholders, the board must provide the same information to a third shareholder (who is not a director) that the other shareholders receive by virtue of their management position. This applies particularly to information that could have significant consequences for decision-making within the company.
The Enterprise Chamber has held that violation of this duty of care can, in itself, raise doubts about proper management of the company.
In practice
The position of individual shareholders regarding information rights is not always clear. This can lead to unpleasant discussions and disputes between shareholders and directors.
In the recent Notamail case, the Enterprise Chamber held that in companies with two shareholders – where one holds the majority of voting rights and also serves as the sole director – the management board has a special duty of care towards the minority shareholder who is not a director. In such cases, the board must adequately answer reasonable questions from the minority shareholder, even outside the context of a shareholders’ meeting.
However, this right to information has its boundaries. Courts will balance the shareholder’s legitimate interest in information against the company’s interests and the practical burden on management, as is demonstrated by a recent judgement by the Arnhem-Leeuwarden Court of Appeals.
What can foreign shareholders do?
Foreign shareholders in Dutch companies have the same statutory rights as Dutch shareholders. If you are a foreign minority shareholder in a Dutch B.V. and experience difficulties obtaining information, consider the following steps:
- Request information formally by submitting written requests for specific information, clearly stating why this information is relevant to your position as shareholder.
- If you are a minority shareholder in a closely-held company where the majority shareholder also serves as director, explicitly reference the special duty of care established in Dutch case law.
- Keep detailed records of all information requests and responses (or lack thereof).
- If information is withheld without justification, you may request a shareholders’ meeting (article 2:220 DCC).
- Initiate inquiry proceedings before the Dutch Enterprise Chamber if there are grounds to doubt proper management.
Shareholders’ agreements as a preventive measure
To limit the risk of future shareholders’ disputes, agreements can be made about information provision from the management board to shareholders (whether or not at the request of an individual shareholder) in writing in a shareholders’ agreement.
For foreign shareholders, a carefully drafted shareholders agreement is particularly valuable, as it can bridge potential gaps in understanding of Dutch corporate law and create clear, enforceable obligations.
More information? Please contact j.overdijk@vantill.nl