Spring naar content

Corporate. Transferability shares. Shareholder quality requirements

The flexibility of Dutch corporate law raises questions as to the extent one may make shares practically untransferable to third parties by implementing explicit shareholder quality requirements. An interesting and recent article in the Dutch legal magazine WPNR by P.H.N. Quist and W. Peters explores this topic and concludes that these provisions can generally be implemented in the articles of association but that such provisions may also be set aside by the judge in case this is in the interests of third parties – mostly creditors and creditors representatives of selling shareholders – provided that the interests of others are not materially harmed. See article 2:195 paragraph 7 of the Dutch Civil Code.
For the recovery specialists amongst you, Dutch WHOA-proceedings are neither part of this article 2:195 paragraph 7, nor are provisions of article 2:195 Dutch Civil Code explicitly exempted by article 370 lid 5 Dutch Bankruptcy Act – which article sets aside an impressive number of corporate provisions in cases of pending WHOA proceedings -. So, the convergence between corporate law and that specific part of insolvency law remains momentarily undecided.