In both limited companies (in Dutch: B.V.’s) and public limited companies (in Dutch: N.V.’s) it is mandatory to have a management board in place. A management board may consist of one or more board members. The number of members of the management board is usually determined in the articles of association of the entity.
N.V.’s and B.V.’s fulfilling the conditions as listed below and having complied with the mandatory registration of such fulfilment with the Chamber of Commerce for three subsequent years, are obliged to have a supervisory board in place under the “mandatory two-tier regime for large companies”:
- the sum of the issued capital and reserves as shown in its balance sheet and the accompanying explanatory notes amounts to at least EUR 16,000,000;
- pursuant to a statutory provision, the entity or a ‘dependant company’ (which is further defined in Dutch law) of such entity has established a works council;
- generally, more than 100 employees are working for the entity and its dependant companies.
The supervisory board under the mandatory two-tier regime for large companies should be distinguished from the supervisory board (or a one-tier board with executive and non-executive board members) the N.V. and B.V. may opt for outside this regime. The most important differences are that under the mandatory two-tier regime for large companies, the supervisory board has broader statutory tasks being the appointment and dismissal of directors and the right of approval in relation to certain board resolutions. Outside of this regime, the main task of the supervisory board is to supervise the policy pursued by the management board and the general course of affairs of the entity.
N.V.’s and B.V.’s may voluntarily opt for application of the two-tier regime for large companies (and the broader statutory tasks for the supervisory board as mentioned before), but only in case the entity or a dependant company has a works council in place.