“The managing director occupies a special position within the organization. In-depth knowledge and experience with the appointment and dismissal of directors is therefore a must”

The managing director is at the head of a legal entity, such as a private limited company (BV) or public limited company (NV). He or she represents the company, sometimes together with other directors.

The managing director occupies a special position within the organization due to his or her appointment and authority to legally represent the company. Trust in the director, from both shareholders and other stakeholders, is crucial. Moreover, the legal position of directors under the articles of association is regulated differently in the Netherlands than for other employees. The director has a relationship with the company under both company law and (often) employment law.

This means that a lot is involved in the appointment and dismissal of directors. It is important that a director is legally appointed. What will be the director’s mandate? For many directors, an important part of the remuneration is linked to the results and value of the company in the long term. These kinds of agreements must be properly laid down. Specific rules and conditions also apply to the dismissal of directors. Obtaining legal advice in advance is therefore a must.

When it comes to managing directors, we help with the following:

  • appointment of managing directors
  • drafting or assessing employment contracts or management agreements with managing directors
  • designing and drawing up a contractually determined severance package (‘golden parachute’)
  • assess whether there is a legally valid ground for dismissal
  • adequate and expert assistance to come to dismissal and in the manner established by law and the articles of association
  • convoking and attending general meetings of shareholders (AGMs) where the intended termination of the managing director is on the agenda
  • making amicable termination arrangements between the company and the managing directors
  • assessing (draft) settlement agreements between the company and the managing directors
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Directors in practice

Is there a valid reason to dismiss the director? Has the shareholders’ meeting been legally convened and have the principles of due process been respected? Is the director a ‘good leaver’ or ‘bad leaver’ and is he or she entitled to contractual severance pay?

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