[ESTABLISHING A BUSINESS ENTITY IN THE NETHERLANDS] 350 350
example elect the system that the company can only be represented by two directors jointly or by the full board, with a power of attorney attributed to one or more directors specifically prescribing their authority. In acting they will then act as proxy for the board, not as director. Supervisory Board The supervisory board is appointed and dismissed by the shareholders meeting and may consist of one or more members. The task of the supervisory board is to review the functioning of the director(s) and to advise them. Since 2013 it has been possible to create a one tier board formed by executive directors and non-executive directors. This is a concept which is not commonly used in the Netherlands. A supervisory board is optional unless the company has a certain size and therefore qualifies as a large company (a so-called structuurvennootschap ). These companies are companies with an equity (issued and paid share capital plus reserves) of € 16 million, a works council and at least 100 employees working in the Netherlands. Their supervisory board needs to have at least three members. In a structuurvennootschap the Supervisory Board has some powers which are otherwise the domain of the shareholders meeting, e.g., the appointment and dismissal of managing directors and the approval of certain board resolutions (amongst others: sizable mergers or acquisitions, amendment of the articles of association or winding up). Other legal entities Other types of legal entities which are being used commercially are the cooperative named coöperatie and the mutual (insurance) company named onderlinge waarborgmaatschappij . Both are derived from
another legal entity, the association, named vereniging . The coöperatie traditionally is a form of agricultural organization where the members trade their produce with a central producing unit owned by the coöperatie . The coöperatie sells the end product on behalf of the coöperatie . The members receive a price for their produce and on top of that they share in the profit of the coöperatie . Members may be fully liable, limited liable or not liable at all towards third parties, depending on the structure which is being implemented and as such registered with the trade registry. Although still in use in agricultural settings, nowadays the coöperatie is also chosen by professionals, such as lawyers or accountants, for reason of the possibility to limit liability and to steer clear from certain tax implications. The onderlinge waarborgmaatschappij is in fact a coöperatie which undertakes insurance activities primarily for its members. It may also perform such activities for third parties, provided that the activities performed for the members form the greater part. The last legal entity which one may encounter in the Netherlands in relation to corporate structures is the foundation named stichting . A foundation is an entity in itself, governed by a board which, depending on the organizational statute, may have a supervisory body. The foundation does not issue shares nor membership rights and the equity of the foundation will be solely available to further the statutory objectives of the foundation. The statutory objectives may not consist of making distributions to its incorporators or third parties unless the third-party distributions have an idealistic or social purpose. Foundations are
ILN Corporate Group – Establishing a Business Entity Series
Made with FlippingBook Ebook Creator