The main legislation governing all businesses and corporate laws in the Netherlands is the Company Act of Holland. It largely provides all the regulatory guidelines regarding organization and the legal framework for continuous business operations for all legal entities recognized by the Netherlands. The Dutch Civil Code (“Burgerlijk Wetboek”) is a representation of the basis for all Dutch corporate laws in the areas of companies registered in Holland, and is considered the primary source for company legislation regarding Dutch corporate law.
Even though the company act is a rather broad outline, it contains the rules for establishment and company formation in the Netherlands, including the establishment procedures, the types of companies that the business can incorporate, and the regulations applicable. A foreign entrepreneur willing to set up a business entity in Holland must firstly get full information about the legal entities that can be set up. In most cases appointing a specialist lawyer is a strong recommendation, as the requirement of specialized advice is considered very important during this process to comply with the corporate laws in the Netherlands.
As an example, in accordance with the type of business activity and the desired manner of its functioning, an entrepreneur may open a limited liability company, commonly referred to as a BV, or a joint stock corporation commonly called an NV, a general partnership or a limited partnership. Important note here is that Dutch partnerships are not considered as individual legal entities.
All regulations provided by the aforementioned Dutch corporate laws are compliant in accordance to the European Community directives and the Act on the supervision of the securities Trade and the Listed Companies Act of 1996. This Act regulated several aspects of running a company in the Netherlands within the framework of corporate law in the Netherlands. Moreover, the Dutch corporate law provides that an individual investigation procedure can be conducted at any time to verify the firms honesty, by the Dutch Enterprise Chamber. However, this action is not considered mandatory in order for a company to be validated in accordance with Dutch Corporate Law.
The Dutch Employment law, another key piece of legislation governing corporate laws in the Netherlands, provides the essential rules and regulations when it comes to aspects such as employment requirements, rights and obligations of both the employer and the employee, working hours, salaries and wages and employment contracts. On a broad framework, the employment law in the Netherlands is not very restrictive as in other countries. As an example, it is not mandatory for a business conforming to Dutch corporate laws to provide a written contract for employment. However, the procedure governing aspects of terminating employees or abrupt dismissal is more complex, as the rights of every employee are strongly clarified by the employment law. The corporate laws in the Netherlands are considered fairly flexible in terms of workforce management and are characterized by a large number of particularities.
Dutch Corporate Laws in the recent years
In addition to the above, there have been several amendments in the particulars of Dutch Corporate Laws in the recent years, such as the inclusion of mandatory bid exemptions, Status of Management and Supervision Acts, Corporate Governance Bill, inclusion of flexibility in Dutch BV laws and various others. These changes, as well as the continuous procedures of amendment make the inclusion of a well-qualified and competent Dutch corporate law expert in the company mandatory, right from its early days of incorporation and operation.