Which corporate legal issues do companies in the Netherlands face most?

The legal problems that most often reach a Dutch company are remarkably predictable, and most of them can be traced back to a document that was never drafted properly or never used at all.

Four categories account for the majority. Contract disputes over performance, payment and termination, where the decisive question is usually whether general terms and conditions were validly incorporated before the contract was concluded, and whether a notice of default was given in the form Article 6:82 of the Dutch Civil Code (BW) requires. Employment disputes, where Dutch dismissal law leaves an employer only three routes, each with its own conditions. Corporate and shareholder disputes, where the articles of association and the shareholders’ agreement determine what can be forced and by whom, and where inquiry proceedings and the compulsory transfer or withdrawal of shares provide the ultimate remedies. And regulatory exposure, from data protection and competition law to sector-specific supervision.

Two structural risks cut across all four. Directors can be held personally liable, to the company under Article 2:9 BW and to third parties or the bankruptcy estate if the company fails, and that exposure increases with administrative failures such as late filing of the annual accounts. And a claim left too long can become time-barred, because limitation periods in Dutch law are shorter than many foreign businesses expect.

Below we work through each category, explain what typically goes wrong, and set out the preventive steps worth taking before a dispute arises rather than after.

In short: which legal issues do Dutch companies face most?

Contracts, employment, shareholder relations and regulation, with director liability and limitation periods as risks across the board. The table gives the key rule for each.

Why do contract disputes arise so often?

Because many companies rely on documents that do not hold up: general terms that were never validly incorporated, unclear specifications or no written notice of default. Under Dutch law, the formalities often decide who wins.

Are your general terms and conditions valid?

Only if they were agreed and, in most cases, made available to the other party before or when the contract was concluded (Article 6:234 BW). If not, the other party can annul unreasonably onerous clauses, such as a limitation of liability.

Between businesses, a “battle of forms” often arises: both parties refer to their own terms. Under Article 6:225(3) BW, the terms referred to first apply, unless the other party explicitly rejects them. For international contracts, the Vienna Sales Convention (CISG) may apply, with different rules. Check which terms apply before the contract is signed.

How do you put the other party in default?

Usually with a written notice of default (ingebrekestelling) that gives a reasonable period for performance (Article 6:82 BW). Only once that period has passed is the other party in default, and only then can you claim damages or terminate the contract.

There are exceptions, for example when a fixed deadline has passed or when the other party has made clear that it will not perform (Article 6:83 BW). Relying on an exception is risky, so in case of doubt, send a notice anyway.

Late payment

Between businesses, statutory commercial interest (wettelijke handelsrente) applies automatically from the agreed payment date, or if no date was agreed, 30 days after receipt of the invoice (Article 6:119a BW). Payment terms of more than 60 days are only valid in exceptional cases. When a large company buys from an SME, the maximum is 30 days, and a longer term is void.

Common causes of contract disputes include:

• unclear or incomplete specifications of what must be delivered;
• disputes about whether performance was on time and of the agreed quality;
• termination without a valid notice of default;
• limitation of liability clauses that turn out to be invalid.

What goes wrong in employment matters?

Mostly dismissals that are started without a solid file or via the wrong route. Dutch law gives an employer three routes to end a permanent contract, and each has its own conditions.

The three routes are: termination by mutual consent in a settlement agreement, dismissal with a permit from the UWV (for economic reasons or long-term illness), and dissolution by the subdistrict court (for other grounds, such as poor performance or a disturbed working relationship). The employer must have a reasonable ground under Article 7:669 BW and must first consider redeployment.

Other recurring issues:

• the chain rule for fixed-term contracts (Article 7:668a BW): more than three contracts or more than 36 months results in a permanent contract;
• wage payment and reintegration during illness, where mistakes can lead to a wage sanction from the UWV;
• non-compete clauses that are not valid in a fixed-term contract without written reasons;
• compliance with a collective labour agreement (cao) that applies to the sector;
• complaints about discrimination or harassment.

An employee whose contract ends is generally entitled to a transition payment of one third of a monthly salary per year of service, capped at €102,000 in 2026 or one annual salary if higher.

How are shareholder disputes resolved?

First through the articles of association and the shareholders’ agreement, and if that fails, through the court. The documents drafted at the start usually decide who can force what.

Why the shareholders’ agreement matters

A good shareholders’ agreement regulates what happens in case of deadlock, the exit of a shareholder, a dispute on the valuation of shares and the appointment of directors. Clauses such as drag-along, tag-along and good leaver / bad leaver provisions prevent a disagreement from paralysing the company. Many disputes we see arise because such provisions were missing or poorly drafted.

Statutory remedies

If the documents offer no solution, Dutch law has two main routes:

• Dispute resolution proceedings (geschillenregeling, Articles 2:335 to 2:343c BW): a shareholder can be forced to transfer their shares if their conduct seriously harms the company, or a shareholder can demand that the others buy their shares if their rights are prejudiced.
• Inquiry proceedings (enquêteprocedure, Article 2:344 and following BW) before the Enterprise Chamber (Ondernemingskamer) of the Amsterdam Court of Appeal: the court can order an investigation into the policy of the company and take immediate measures, such as suspending a director or appointing a temporary one.

Both routes take time and money. Prevention, through well-drafted documents and clear decision-making, is almost always cheaper.

Which regulatory rules create the most risk?

Data protection, competition law and sector-specific rules. Fines can be high, and supervisors increasingly target small and medium-sized companies as well.

• Data protection: the General Data Protection Regulation (GDPR) applies to every company that processes personal data. The Dutch Data Protection Authority (Autoriteit Persoonsgegevens) supervises, and fines can reach €20 million or 4% of worldwide annual turnover, whichever is higher (Article 83 GDPR).
• Competition law: the Competition Act (Mededingingswet) prohibits agreements that restrict competition, such as price-fixing or market sharing. The Authority for Consumers and Markets (ACM) supervises and can impose fines.
• Anti-money laundering: financial institutions and certain professions, such as accountants, lawyers and estate agents, must carry out customer due diligence under the Anti-Money Laundering and Anti-Terrorist Financing Act (Wwft).
• Transparency: companies must register their ultimate beneficial owners in the UBO register. Since the Court of Justice of the EU ruled on 22 November 2022 (joined cases C-37/20 and C-601/20), the register is no longer open to the general public.
• Sector rules: energy, finance, healthcare and transport each have their own supervisors and permits.

When is a director personally liable?

When a director has seriously failed in their duties. A director of a Dutch BV or NV is in principle not liable for the company’s debts, but that protection has limits.

Liability towards the company

Under Article 2:9 BW, every director must perform their duties properly. A director is only personally liable to the company if they can be seriously blamed for improper performance. Examples include acting clearly outside the company’s objects or ignoring the articles of association.

Liability in bankruptcy

If the company goes bankrupt, the trustee (curator) can hold the directors jointly and severally liable for the deficit if the board clearly performed its duties improperly and this was an important cause of the bankruptcy (Article 2:248 BW). The claim only covers improper performance in the three years before the bankruptcy.

Administrative failures weigh heavily here. If the board did not keep proper accounts (Article 2:10 BW) or did not file the annual accounts in time (Article 2:394 BW), the law assumes improper performance and presumes it was an important cause of the bankruptcy. The annual accounts must be filed with the trade register within eight days after adoption, and no later than twelve months after the end of the financial year. Filing late is one of the most common, and most avoidable, reasons why directors end up personally liable.

Liability towards third parties

Creditors can also hold a director liable under Article 6:162 BW, for example when the director let the company enter into obligations while knowing it could not meet them. The threshold is high: the director must be personally and seriously to blame.

How quickly does a claim become time-barred?

Often within five years. Many foreign businesses assume they have more time and lose a claim as a result.

• A claim for performance of a contract becomes time-barred five years after it became due (Article 3:307 BW).
• A claim for damages becomes time-barred five years after the injured party became aware of the damage and the person liable, and in any case twenty years after the event (Article 3:310 BW).
• A buyer who discovers a defect must notify the seller within a reasonable time (Article 7:23 BW); otherwise, the buyer loses their rights.

A limitation period can be interrupted, for example by a written notice in which you clearly reserve your right to performance (Article 3:317 BW). The period then starts again. Keep track of such deadlines and send an interruption letter in time.

How do legal issues affect company operations?

They affect decisions, processes and budgets. A company that takes legal risks into account early saves time and money later.

If a company gets into financial trouble, the Act on Court Confirmation of Extrajudicial Restructuring Plans (Wet homologatie onderhands akkoord, WHOA), in force since 1 January 2021, allows it to offer a plan to creditors that the court can make binding. That can avoid bankruptcy, but it requires timely action.

Which preventive steps are worth taking?

A few basic measures prevent most of the problems described above. They cost far less than a dispute.

1. Draft general terms and conditions that fit your business, and make sure they are sent with every quotation and order confirmation.
2. Use written contracts for important relationships, with clear specifications, deadlines and a liability clause.
3. Send a written notice of default before you terminate a contract or claim damages.
4. Draw up a shareholders’ agreement with provisions on deadlock, exit and valuation.
5. Keep proper accounts and file the annual accounts on time.
6. Build a dismissal file before you start a dismissal, and choose the right route.
7. Check your processing of personal data against the GDPR and keep a record of processing activities where required.
8. Monitor limitation periods and interrupt them in time.

For international companies, it also helps to check which law applies to contracts and employment relationships, and which court has jurisdiction. Dutch mandatory rules, for example on dismissal, can apply even if a contract chooses another law.

In summary

• Most corporate legal problems stem from documents that were missing or poorly drafted.
• In contract disputes, valid general terms and a written notice of default (Article 6:82 BW) are often decisive.
• Shareholder disputes are best prevented with a shareholders’ agreement; the statutory remedies are dispute resolution and inquiry proceedings.
• Late filing of the annual accounts creates a presumption against directors in bankruptcy (Article 2:248 BW).
• Many claims become time-barred after five years; interrupt the period in time.

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