A pessimist sees problems in every challenge, an optimist a challenge in every problem
Dutch corporate law concerns corporations like the private (B.V.) and public limited liability company (N.V.), but also sole proprietorships, the partnership firm (v.o.f.), the association and the foundation. It regulates the relationship and interaction between shareholders, directors, employees, creditors and other stakeholders, such as consumers and the Government. Like in many other countries, the private and public limited liability company, but also the foundation are recognized as independent legal entities, which – to a significant extent – have the same rights as natural persons. They can for example enter into contracts, request permits, litigate and have a right to privacy. They may also, either in addition to their directors or not, be prosecuted and convicted of criminal offences like fraud, environmental offences and wrongful death. Similarly to natural persons they can claim protection of their rights as a suspect, while they are also protected from random government action. Just as natural persons they are “born” by their founding, can “marry” through mergers, can have “daughters” and “die” by lifting or bankruptcy.
With these independant legal entities the directors thereof are, to an important extent, well protected. However, this protection is not absolute and under circumstances natural persons who hold (key) managerial positions and lead the company can be subject of civil litigation in their private capacity or be prosecuted and punishable in person in torts or in case of any criminal or unlawful act.
For sole proprietorships and associates in partnership firms the law states that the company is not recognized as a separate, let alone independent, legal entity, which means there is no legal or economic/financial separation between the company’s and the owners private assets, while the owner(s) are liable for all actions of ‘the company’.
Because leading an enterprise entails risks many medium sized and large corporations use a general counsel, generally an independent attorney. His primary task consists of the provision of legal advice and representation of the company in (complex) legal disputes,. Because many small(er) entrepreneurs cannot afford their own general counsel, we have developed the SME picket and the General counsel Agreement.
We will be attending the 7th Corporate Counsel Exchange as solution provider and presiding the Roundtable Debate mentioned below, maybe we will meet there.