7.6.1 Introduction

One of the principal thoughts behind Dutch private limited company law is that the majority shareholder must consider the interests of the minority shareholder. For example, this has to be expressed in the policy of distribution of profits.1

Taking the presence of the minority shareholder into account may entail costs and efforts. The presence of the minority shareholder may consequently be a burden to the majority shareholder, especially in the situation of a group of companies. For instance, in contrast with the situation of a wholly owned subsidiary, general meetings have to be held (or at least the adoption of resolutions in lieu of a general meeting is more difficult), rules regarding the annual accounts are more strict (consolidation is harder to achieve), and contracts between the parent company and the subsidiary company have to take place at arm's length.2

In 1988, the Dutch legislator introduced the squeeze-out proceedings of Art. 2:201a DCC.3 The thought behind the squeeze-out proceedings is that in certain situations the interest of the minority shareholder in the continuation of his shareholding does not balance the interest of the majority shareholder of getting rid of him. Squeezing out the minority shareholder may save considerable costs and efforts the majority shareholder has to make due to the presence of the minority shareholder. Art. 2:201a DCC provides that a holder of at least 95% of the issued share capital of a BV can squeeze out the joint other shareholders of that BV.4Two or more group companies jointly holding 95% or more of the issued share capital of the company qualify for the squeeze-out proceedings as well. A nearly similar section applies to the NV. Whether or not the company is listed on a stock exchange is not of relevance. The section applying at the NV is found in Art. 2:92a DCC.

The court must decline the claim of the majority shareholder in a limited number of situations. Art. 2:201a paragraph 4 DCC stipulates that the court must disallow the proceedings against all defendants if, notwithstanding indemnification:

Statute does not contain the mirror image of the squeeze-out proceedings: the right of appraisal when the 95% threshold for squeezing out is met. The Jack of this mirror image is subject to debate in Dutch legal literature. A new incentive for this discussion was the introduction of an additional sell out right into Dutch company law, by way of the Thirteenth EC Directive.5 In the following, the Dutch discussion regarding the appraisal right will be exposed.6