In general, the shareholders’ meeting dismisses the board. The process of dismissing a director is a delicate one. A slip up will result in the decision being voidable or even null and void. This means that the director was never actually dismissed, with all the associated consequences. Good supervision is crucial in this process.
Important formalities for the dismissal of a director via the shareholders’ meeting
The dismissal of a director is a so-called ‘corporate’ decision. This decision cannot be equated with the dismissal of an employee, as a result of which the UWV normally does not play a role in the dismissal process. In order to dismiss a director, the provisions of the articles of association and of a shareholders’ agreement, if any, must be carefully complied with. If not, the resolution can be annulled. It is also important to simultaneously appoint a new director (in case the company will have no directors left after the dismissal of the director concerned).
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Duration and costs of the dismissal of director via the shareholders’ meeting
How long does it take to dismiss a director? Normally, there must be a certain period of time between the convening of a general shareholders’ meeting and the actual holding of the shareholders’ meeting. Sometimes this is a period of eight days. It can also be a period of at least 15 days. The period depends on what is prescribed by the articles of association. The costs involved in the dismissal of a director are usually limited. Is a considerable interest involved, or is a dispute expected? In that case it is advisable to contact a lawyer in advance.
Dismissal of a director via the court
Does the director also hold shares in the company, which makes it impossible to dismiss him via a shareholders’ meeting? In that case, there are other options. For example, the court can (on request) dismiss a director, or a request can be submitted to the Netherlands Enterprise Court at the Amsterdam Court of Appeal (Ondernemingskamer) for the immediate suspension of a director. If the director has caused damage, the Enterprise Court may also order an investigation. If the investigation reveals that the director concerned is responsible for mismanagement, the director will not only remain suspended, but will also have to bear the costs.
Need advice about the dismissal of a director? Bring in VIOTTA
Do you want to dismiss a director? Or do you, as a director, expect you might be dismissed unjustly? If so, contact us. VIOTTA’s lawyers are happy to help you and to think along with you. Thanks to our specific expertise and many years of experience, we are well placed to assist you. And always consider the costs, so you will not be confronted with an unpleasant surprise afterwards. Contact us, we are happy to help you.
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VIOTTA is a law firm based in Amsterdam and is specialized in advising on the areas of corporate law, mergers and acquisitions, contract law and corporate & commercial dispute resolution. We advise in transactional matters.