Articles of association (statuten)

The articles of association are the constitutional document of a Dutch legal entity. They are executed by notarial deed, filed with the Chamber of Commerce and publicly accessible, and they bind the company, its bodies and its shareholders.

Legal basis and required content

For the B.V., Article 2:177 of the Dutch Civil Code requires a notarial deed. Article 2:177 and following prescribe a minimum content: the name of the company, beginning or ending with the words besloten vennootschap met beperkte aansprakelijkheid or the abbreviation B.V., the seat within the Netherlands, the objects, and the nominal value of the shares and the currency in which they are expressed.

Beyond that minimum the articles regulate the internal organisation: the composition and powers of the management board, whether there is a supervisory board, how directors are appointed and dismissed, how the general meeting is convened, how shares are transferred, whether there is a transfer restriction, and what happens on dissolution.

Amendment

Amendment requires a resolution of the general meeting followed by a notarial deed, and the articles themselves may impose a qualified majority or a quorum. Where a share class is prejudiced, the approval of that class may be required. An amendment takes effect on execution of the deed, not on the resolution.

Where it goes wrong

Two problems recur. The first is the objects clause that no longer covers what the company actually does, which can matter in financing, in insurance and, in rare cases, for the validity of transactions. The second is the assumption that a shareholders’ agreement can override the articles. In the relationship between shareholders it binds them contractually, but a corporate resolution taken in accordance with the articles remains valid even where it breaches the agreement.