Transfer of shares in a private limited company: we are your trusted advisor

Operating your enterprise in the Netherlands is one matter, but elevating it to higher echelons is an entirely different venture. Improvement and expansion occasionally requires onboarding a fresh shareholder, such as an investor, a corporate ally or a significant team member.

If you undertake this after you establish a private limited company in which you manage your business, as opposed to initiating it directly from the start, you will necessitate the transfer of shares in your private limited company.

The intricacies of the procedure for transfer of shares in a private limited company is elucidated in this article.

Understanding the transfer of shares in a PLC

Share transfers within a Dutch private limited company involve the sale and transfer of ownership rights by means of a notarial deed between two separate contracting parties.

The procedure for transfer of shares in a private limited company process adheres to basic principles governed by the specific company’s articles of association and Dutch corporate law. Existing shareholders within the company may have pre-emptive rights, allowing them the first opportunity to acquire any shares being transferred. Valuation methods and conditions for transfer are often outlined in the applicable articles of association.

The importance of a smooth and transparent share transfer process lies in maintaining corporate stability, preserving the company’s financial integrity, and respecting the rights of existing shareholders.

In short, clear documentation and compliance with legal regulations are essential to facilitate the efficient and equitable transfer of shares in a private limited company while upholding the company’s governance structure.

Legal requirements for the transfer of shares in a PLC

The procedure for the transfer of shares in a private limited company involves adherence to legal requirements and procedural steps.

Basically, the specific company’s articles of association and Dutch corporate law delineate fundamental principles governing share transfers. Shareholders within the same company typically possess pre-emptive rights, granting them the first option to acquire shares offered for transfer. These rights may be restricted or expanded based on the company’s specific provisions. The articles of association often detail valuation methods and conditions for share transfers, ensuring a transparent and fair process.

Additionally, certain restrictions, such as board approval or approval from existing shareholders, may be imposed to safeguard corporate interests and maintain stability. Compliance with legal procedures, including notification of relevant parties and updating the shareholders’ registry, is paramount.

Clear administration, encompassing a share transfer agreement and updated shareholder records, is essential to ensure the correct transfer of shares. The importance of a well-defined and legally compliant share transfer process lies in upholding corporate governance, preserving financial integrity, and respecting the rights of existing shareholders, ultimately contributing to the company’s stability and continued success.

Our power lies in the ability to provide advice to you in administratively burdensome processes, especially if this is done in the English language. We can assist you finalising the shares’ transfer properly and efficiently.

The Dutch notary’s role in the procedure for transfer of shares in a PLC

The engagement of a Dutch civil law notary is crucial in the procedure for transfer of shares in a private limited company. The civil law notary plays a crucial role in: 

  • formalising and legalising the transfer by preparing; and 
  • executing the necessary documentation (notarial deed of shares transfer). 

This typically includes: 

  • drafting the share transfer agreement;
  • verifying compliance with legal requirements and the company’s articles of association; and ensuring the proper valuation of the shares. 

The civil law notary facilitates the signing of the transfer deed, officially transferring ownership, and oversees the deposit of the share purchase price into the company’s bank account. 

Our involvement as an international notary firm, in English if needed, would add a layer of legal certainty to the process, ensuring that the share transfer adheres to regulatory standards and safeguards the interests of all parties involved in the transaction.

frequently asked questions

Below, we have listed a few frequently asked questions by individuals who contact us. 

How does share transfer in a Dutch private limited company impact the company’s governance and management structure?

Share transfers in a Dutch private limited company influence governance by altering shareholder composition, impacting decision-making, and potentially restructuring management dynamics.

What role does a civil law notary play in the share transfer process in the Netherlands?

In the Netherlands, a civil law notary is pivotal in share transfers, drafting essential documentation, ensuring legal compliance, and overseeing the official transfer of ownership, providing legal certainty.

Can shares in a Dutch private limited company be transferred to a non-EU resident, and what are the implications?

Shares in a Dutch private limited company can be transferred to a non-EU resident. Implications include adhering to legal requirements, potential tax considerations, and compliance with international regulations and treaties.

Arranging a meeting with us

We would be happy to lend you a hand in all Dutch and international legal matters. If needed, our advice can be in English. We have extensive experience and know-how in the procedure for transfer of shares in a private limited company situated in the Netherlands.

Please do not hesitate to contact us for more information on this topic and to schedule an exploratory appointment. During this appointment, we can precisely identify the necessary steps for the transfer of shares in a private limited company.