A share transfer is the delivery of shares in a private limited company to a new holder. For a BV and an unlisted NV this must be done by notarial deed; without that deed the shares do not pass, even if the purchase price has been paid.
Legal basis
Article 2:196 of the Dutch Civil Code requires a notarial deed for the BV, Article 2:86 for the NV. Article 2:196a provides that the company must acknowledge the transfer, or the deed must be served on it, before the shareholder rights can be exercised. Article 2:194 obliges the management board to maintain the shareholders’ register. The articles frequently contain a transfer restriction: an obligation to offer the shares to fellow shareholders, or an approval requirement, under Article 2:195. Since 2012 such a clause is no longer compulsory, but it still appears in almost all articles.
How it works in practice
The transaction runs in two stages: first the sale and purchase agreement with the warranties and indemnities, then the notarial transfer. Between those moments there is often a period for satisfying conditions precedent, such as approval from the bank, the works council or a regulator. At completion the shareholders’ register is updated, the UBO filing is made and, where needed, directors are appointed or dismissed. The civil-law notary checks title and authority to represent.
Where it goes wrong
The classic error is ignoring the transfer restriction; if the offer obligation is skipped, the transfer can be challenged and fellow shareholders are within their rights. A second problem is an incomplete or missing share register, which makes the chain of title impossible to establish on a sale. Third, warranties and indemnities are often insufficiently aligned with what due diligence actually revealed.
Related terms
The transfer connects to due diligence, to the shareholders’ agreement and to the asset deal as an alternative structure.
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