Exit rights of minority shareholders in a private limited company (IVOR nr. 72) 2010/4.3.5.4.0:4.3.5.4.0 Introduction

Exit rights of minority shareholders in a private limited company (IVOR nr. 72) 2010/4.3.5.4.0

4.3.5.4.0 Introduction

Deze functie is alleen te gebruiken als je bent ingelogd.Deze functie is alleen te gebruiken als je bent ingelogd.Deze functie is alleen te gebruiken als je bent ingelogd.

Furthermore, an important reason may arise if fundamental changes in the structure of the company occur that considerably alter the position of the shareholders.1 The thought behind this important reason is that a shareholder has invested in the company on the conditions set forth in the articles of association. If these conditions change fundamentally, without the shareholder's consent to these changes, the shareholder cannot be expected to remain in the company. After all, the conditions that gave cause to his eretrance in the company have lapsed.2

A comparable criterion can be found in the proposed, but not enacted, § 211 I of the draft bill of 1971.3 This proposed section, which, according to leading opinion, reflects the present law, confers an exit right on the shareholder in the event that the company takes up measures which change the legal and economie relationships between the company and the shareholder in an unreasonable way.4 As follows from this criterion, not only legal changes in the structure of the company, i.e. changes in the articles of association of the company, can justify an exit right. Economie changes can also form such a ground.

Whether or not fundamental changes in the structure of the company justify an exit for the shareholder depends on the circumstances of the case. When assessing the circumstances of the case, the reasonability plays a pivotal role. A similar idea underlies the several appraisal rights embodied in the UmwG. These appraisal rights arise when specific fundamental changes take place, concerning the merger or demerger of the company, or the change of its legal form.5

The shareholder who does not approve of the fundamental change in the structure of the company is entitled to invoke this exit right. However, it may pose difficulties to require the shareholder to vote against the resolution regarding the change, as the duty of loyalty may require the shareholder's consent to the resolution. In order to solve this problem, Röhricht suggests the following solution:

"The exit right is applicable in that way, that it also has to apply in favour of the shareholder who dislikes a change, but in particular exceptional cases, pursuant to his duty of loyalty, is bound not to resist this change wished by his co-shareholders and performed in the interest of the company. In these circumstances, the shareholder is not allowed to block the change. Nonetheless, these circumstances entitle him to exit the company that is changed fundamentally."6

Examples of fundamental changes in the structure of the company are the increase of the share capital and the change of the objects clause.

Deze functie is alleen te gebruiken als je bent ingelogd.