The duties and responsibilities of company directors in the Netherlands are regulated by Book 2 of the Dutch Civil Code (DCC) and by the respective company’s Articles of Association. The Works Council Act 1971 applies to companies with a works council, meaning companies with more than 50 employees.
There are no restrictions imposed by Dutch law regarding the age of a company director or his/her nationality. However, the Articles of Association may set out certain restrictions and may make it mandatory for the director to have a number of special qualifications.
Duties of a Dutch company director
The director has to serve the best interest of the company and its enterprise. When managing the Dutch company, the interest of all the persons involved in the company should be considered.
Improper management, a generally negligent behavior and insufficient management may lead to the director’s liability towards the company.
The duty of loyalty towards the company is one of the most important duties. The director has to put the interest of the company above his or her personal interest. Also, the director must not act as a competitor for the company or use corporate opportunities in his/her own purpose.
The duty of care means that a company director should make sure that the company complies with existent laws, regulations and provisions. All of the director’s decisions and, subsequently, the board’s decisions should be made with the utmost care.
Other duties include: keeping the accounts of the company, preparing and signing the annual accounts, conceiving the company’s strategy and its general financial risks.
Liabilities of a Dutch company director
There are two types of liabilities that can occur: liability towards the company and liability towards third parties.
The director is liable towards the company if he or she breaks the duty of loyalty and the duty of care, meaning that there was serious negligence in managing the company. Generally, the responsibility of the management board towards the company is a collective one. However, each manager is personally responsible for the tasks assigned to him/her. Our law firm in the Netherlands is ready to provide the required assistance in this matter.
Investors that are interested in starting their own business in the Netherlands should seek specialized counselling regarding Dutch companies. Also, our expert Dutch lawyers can duly represent cleints in various litigation cases.
There are no comments