9.2.3 How can the provider of capital without the right to vote influence internal relationships within the BV and safeguard his rights?

Chapter 8 answers the third main question: How can the provider of capital without the right to vote influence internal relationships within the BV and safeguard his rights? Providers of capital without voting rights have several means to enforce their rights or to improve their legal position.

The right to have issues placed on the agenda of the general meeting pursuant to Article 2:224a, paragraph 1 CC falls to the shareholder without voting rights, the holder of shares whose right to vote has been transferred to the usufructuary or pledgee and the holder of a depositary receipt of a share with the right to attend general meetings. All providers of capital who have the right to have issues placed on the agenda but without voting rights must meet the capital requirements. The right to have issues placed on the agenda does not fall to the holder of a depositary receipt without the right to attend general meetings, nor to the holder of a participation certificate. The conclusion is, therefore, that only those with the right to attend general meetings have the right to have issues placed on the agenda. The same conclusion applies to the convening right pursuant to Article 2:220, paragraph 2 CC. Only those who have the right to attend general meetings have convening rights.

The provider of capital with the right to attend general meetings but without voting rights has recourse to a number of legal remedies if his right to information is breached during the general meeting. Such applies provided that the provider of capital without voting rights has asked for information during the general meeting, but to no avail. Of the remedies discussed in section 8.4 to enforce the right to information a claim based on Article 2:217, paragraph 2 CC, the obligation to provide exhibits pursuant to Article 843 Code of Civil Procedure, provisional examination of a witness and the right of inquiry seem the most effective. The right of inquiry has as its limitation that only if the condition of the company or the interest of the inquiry so require, the company can be ordered based on an immediate relief to provide the shareholder with the information that was withheld from him during the general meeting.

Another remedy is the action for cooperation in order to pass a resolution. In my opinion, all providers of capital without voting rights are entitled to such action, except the holder of depositary receipts without the right to attend general meetings. The latter does not after all belong to the circle of stakeholders as referred to in Article 2:8 CC. The basis of such action is corporate reasonableness and fairness. It is my opinion that the court should rule on such action with restraint.

The action to nullify resolutions pursuant to Article 2:15, paragraph 1 sub (b) CC falls to the provider of capital without voting rights belonging to the circle of stakeholders as referred to in Article 2:8 CC. In my opinion, the holder of depositary receipts without the right to attend general meetings is not entitled to such action. It was never the company’s intention that these depositary receipt holders should have any influence on the decision making. The articles of association do not attach the right to attend general meetings to such depositary receipts.

In urgent cases, primarily the provider of capital without voting rights belonging to the circle of stakeholders can request immediate relief on grounds of urgency in preliminary relief proceedings. The grounds for such a request may be a conflict with the principles of corporate reasonableness and fairness. Considering the nature of the procedure and the preliminary character of the order to be imposed, the outcome of this procedure is uncertain for the provider of capital without voting rights.

The right of inquiry falls to all providers of capital without voting rights (provided they meet the capital requirements), except the holders of participation certificates. Based on Article 2:346, paragraph 1 sub (e) CC,1 however, I consider it possible that the right of inquiry will be attached to the holder of a participation certificate by the articles of association or by agreement with the legal person. Moreover, the capital requirement will have to be met, because the holder of a participation certificate will otherwise have a more favourable position than the other providers of capital without voting rights. In addition, I consider it possible that the holder of a participation certificate will join the inquiry procedure as an interested party pursuant to Article 282, paragraph 1 Code of Civil Procedure. The provider of capital without voting rights, who does not meet the capital requirement, can join the inquiry procedure as an interested party. Moreover, the Enterprise Division of the Amsterdam Court of Appeal (Ondernemingskamer) can also officially call up the provider of capital as interested party. In addition, every interested party has the opportunity to submit an independent request, provided it is connected with the subject of the original inquiry request. The provider of capital without voting rights can also profit from the situation in which the legal person itself submits an inquiry request.

The question whether the right of inquiry is effective as a means to protect the financial rights attached to the legal concepts without voting rights, cannot simply be answered affirmatively. However, the outcome of the inquiry procedure may very well lead to a more careful and better motivated decision making process regarding distributions, whereby special attention will be given to the position of the provider of capital without voting rights and to the reasoning by the court to nullify the resolution for reservation.

The action for expulsion in the statutory dispute resolution falls to the shareholder without voting rights and the holder of shares whose right to vote has been transferred to the usufructuary or pledgee, provided the capital requirement pursuant to Article 2:336 CC has been met. The action does not fall to the holder of a depositary receipt, nor to the holder of a participation certificate. The action for resignation pursuant to Article 2:343 CC also falls to the shareholder without voting rights and the holder of shares whose right to vote has been transferred to the usufructuary or the pledgee, but not to the depositary receipt holder, nor to the holder of a participation certificate.

A sticking point in the statutory dispute resolution of the action for expulsion and the action for resignation is that the depositary receipt holder is not entitled to these actions. I fail to see a good reason why the shareholder without voting rights and the depositary receipt holder with the right to attend general meetings should not be entitled to these actions, while the depositary receipt holder has the right of inquiry. Another sticking point in the statutory dispute resolution of the action for expulsion is the capital requirement of at least one third of the issued capital provided by Article 2:336 CC. I cannot think of a good reason for this, either. I argue in favour of levelling up said capital requirement to the capital requirement for submitting a request for inquiry based on Article 2:346, paragraph 1 sub (b) CC, to wit at least one tenth of the issued capital. The holder of a depositary receipt without the right to attend general meetings does not belong to the circle of stakeholders, so that I would not like him to be entitled to the action for expulsion and the action for resignation.

In section 8.10 I reached the conclusion that the voting right on shares without voting rights should not be ‘resurrected’, should the case arise. That would meet with practical obstacles. Moreover, the law provides the shareholder without voting rights with sufficient protection as it is, or with sufficient means to strengthen his position.

Finally, I argued in section 8.11 that the legal position of the shareholder without voting rights can be strengthened, both in and outside the articles of association.