Article 2:244 of the Dutch Civil Code (Burgerlijk Wetboek) provides that every director of a private limited company (BV) can be suspended and dismissed at any time (te allen tijde) by the body authorised to appoint him. Usually this is the general meeting. The articles of association may give that power to another body as well, but cannot exclude dismissal.
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Who can dismiss a BV director?
The body that is competent to appoint directors, in most companies the general meeting of shareholders. In companies under the full large company regime, the supervisory board appoints and dismisses directors. A binding nomination for appointment does not restrict the power to dismiss.
What formalities apply?
The general meeting must be properly convened, with the dismissal on the agenda. The director has an advisory vote (raadgevende stem) in the general meeting (Article 2:227 Dutch Civil Code) and must be given the opportunity to be heard before the decision. If this is not done, the resolution can be annulled by the court (Article 2:15 Dutch Civil Code). Resolutions outside a meeting are only possible if all those entitled to attend, including the director, agree to this way of decision-making (Article 2:238).
What happens to the employment contract?
Many directors also have an employment contract with the BV. In principle, a valid corporate dismissal also ends that employment contract, without UWV permission or court approval, unless a statutory prohibition on termination applies, such as during illness. The notice period still applies, and the director may be entitled to a transition payment (transitievergoeding). If the dismissal is not reasonable, the subdistrict court can award fair compensation (billijke vergoeding).
What should companies and directors do?
Prepare the corporate and employment tracks together. For the company: check the articles, the shareholders’ agreement and the management agreement. For the director: check notice periods, severance clauses and any non-compete clause before signing a settlement.
Frequently asked questions
Can a director be dismissed without a reason?
Yes, corporate dismissal is always possible. The reason matters for compensation, not for validity.
Does the director keep his shares after dismissal?
Yes, unless the articles or shareholders’ agreement contain a leaver clause.
Related terms
- Article 2:227 Dutch Civil Code (advisory vote)
- General meeting of shareholders
- Transition payment
- Fair compensation
Our corporate lawyers and employment lawyers advise companies and directors on dismissal and exit terms. Want to know what this means for your situation? Book a free introductory meeting.
