Directors’ Duties in The Netherlands

>> Powers and Duties in The Netherlands

You must act within the powers imposed by the Business Corporations Act, the Civil Code, and the company’s Articles of Association. As a company director you are required to act in good faith, with due managerial care and with loyalty.

Duties – skill and care

In exercising directors’ powers, you are required to exhibit a certain degree of care, diligence and skill that a reasonable director would exercise in the same circumstances. When acting as a director you should do what a reasonable person would do in looking after their own affairs’ in a similar situation.

Duties – general

As a director, you must act in a way which you think is most likely to promote the success of the company. You need to consider a number of statutory factors relating to corporate requirements, including the long term consequences of your decisions, the company’s reputation and the interests of other stakeholders such as employees, customers and the community.

Directors are obliged to exercise their office with due managerial care, with the term being defined  as acting with:

  • loyalty to the company
  • caution
  • the required knowledge

There are many areas of law that impose duties on directors and senior managers. Matters likely to be of particular relevance, depending upon  the nature of the entity and its activities, are set out below:

  • ensuring proper and accurate administration of the entity is in place
  • preparing annual accounts and ensure the timely filing thereof at the applicable authorities/trade register
  • ensuring the timely filing of tax returns
  • ensuring the payment of social securities for your employees
  • ensuring the proper work permits for foreign nationals, as required, are in place  and maintained
  • ensuring the approval of the dividend payments of the company

Duties – other

There are many other areas of law that impose duties on directors and senior managers. Matters likely to be of particular relevance, depending upon the nature of the entity and its activities,  are set out opposite.


  • Any serious accidental injury, investigations and environmental breaches if applicable must be reported in accordance with company policy.
  • The Dutch Environment Management Act (Wet Mileubeheer), applies to any (legal) person whose conduct could negatively influence the environment. It is important to note that secondary legislation can contain additional rules for specific types of conduct or industries. Certain activities require a licence. There are a number specific legislative acts, inter alia on soil protection, atmospheric pollution, noise pollutions and waste substances. As a director, you should be aware of the environmental legislation applicable to the company’s business. Violation of environmental law may lead to severe consequences, including administrative fines. A company may also be held liable by the Dutch authorities or third parties for damage caused to the environment or property. Furthermore, you could be held personally liable for environmental offences under criminal law.

Health and safety

Dutch labour law imposes strict liability on companies for injuries and damage to employees. It is important to know which safety rules apply to the company’s industry and to set up, and strictly endorse, safety regulations, if necessary. If the line of business includes activities that exert a risk to public health and safety, it is likely that you need to obtain a licence. Such licences are usually conditional on certain safety precautions. Not complying with health and safety rules and regulations could lead to administrative fines or even criminal or civil liability.

Competition law

You must comply with all competition law and regulations. Fines of up to €450,000 can be imposed on directors who have given instructions to violate competition rules (eg resale price maintenance, anticompetitive agreements) or have exercised de facto leadership over a violation (fines can also be imposed for non-cooperation with an investigation of the Dutch competition authority). Individuals that have held a management position (managers, department heads, etc) and have either themselves participated in the infringement or have not acted while being aware of the infringement are most likely to be held personally liable.


  • You must comply will all areas of tax law and regulations. The company is obliged to notify the Dutch tax authorities and the social security board in writing if it becomes aware that it will not be able to pay VAT, wage withholding tax or certain other taxes, excise duties or social contributions. The notification must be made within two (2) weeks of the date on which the aforementioned taxes, duties or contributions should have been paid.
  • If the company has notified the Dutch tax authorities and the social security board in a timely manner, a director and the other directors of the company are only jointly and severally liable with the company for unpaid taxes, duties, and social security contributions if the relevant authority can establish that the non-payment of the taxes, duties or social security contributions due is the consequence of manifestly improper management during the three (3) years preceding the date of notification. In such event, you are only allowed to demonstrate that the non-payment was not caused by your manifestly improper management if you prove that you cannot be blamed for the failure to notify the  relevant authorities.
  • If the company participates in an industry-level pension fund, a similar obligation to notify the pension fund and a similar liability for unpaid pension premiums may exist.

Record keeping and accounting

  • There is a duty on directors to ensure certain records are maintained while not necessarily within the premises/offices. Dutch law does not recognise the position of a company secretary. Therefore, responsibilities and duties normally associated with a company secretary are the responsibility of the directors.
  • The directors are compelled to keep the books and records of the company in such a manner that the financial position of the company can be verified at all times. Further, the directors need to maintain and update a shareholders’ register which should be held at the office of the company.
  • In addition to the obligation to maintain a proper administration, the directors must also prepare the annual accounts of the company within five (5) months after the end of the company’s financial year. The general meeting of shareholders adopts the annual accounts. The annual accounts must be signed by each director of the Board. If a director fails to sign the annual accounts, the reason for this must be stated.


Pursuant to the DCC, the distribution of dividends and reserves requires the prior approval of the directors. The directors have to refuse approval if it knows or should reasonably foresee that the company will not be able to continue to pay its debts after the distribution. The consequence of a wrongful approval is joint and several liability of the directors for the deficit caused by the distribution (increased with statutory interest). The recipients of a distribution can be held liable for compensation if they did not act in good faith, that is if they knew or would reasonably foresee that the company would not be able to continue to pay its debts after the distribution. A director, who proves that the distribution is not attributable to him and that he has not been negligent in taking measures to avert the consequences, is not liable.

Data privacy

  • Under the Dutch Data Protection Act (Wet bescherming persoonsgegevens), the controller is responsible for ensuring compliance with the Dutch Data Protection Act regarding the processing of personal data and therefore may be liable when the processing of personal data is not compliant.
  • A controller is the natural person or legal entity who/that (alone or together with others) determines the purpose (and the means) for the processing of personal data.
  • The Dutch Data Act does not impose specific obligations on directors or specific stipulations regarding director’s liability. A director might be held liable instead of or in addition to the company under the general stipulations regarding director’s liability included in the DCC.


  • In case of bankruptcy, each director may be jointly and severally liable to the company’s creditors for debts which cannot be satisfied from the bankrupt company’s assets. Such a situation arises if the management board has clearly performed its duties improperly (ie the directors can be blamed for the company’s improper management) during a period of three (3) years preceding the bankruptcy and if it is probable that this was an important cause of the bankruptcy.
  • However, if an individual director proves that he was not to blame for the improper performance and he did not fail in his duty to prevent the consequences of the improper management, he cannot be held liable. Furthermore, a director who abstains from voting with respect to a decision that constitutes improper management and withholds from further cooperation in performing the improper decision by resigning from the management board will not be held liable.


  • Like all employees, you must comply with AntiBribery and Corruption legislation, including the UK Bribery Act and the US Foreign Corrupt Practices Act, and must understand, follow and promote the internal policies and procedures.
  • Under the Dutch Criminal Code (the “CC”), a distinction is made between bribery of public officials and private commercial bribery, depending on the capacity of the person bribed. A further distinction is made between active and passive bribery. Active bribery relates to the briber’s conduct in making a gift or a promise or rendering or offering to render a service. Passive bribery, on the other hand, refers to the recipient (ie the person being bribed or allowing himself or herself to be bribed by accepting a gift, promise or service).
  • The punishment for bribing a public official to induce him or her to act in breach of his or her duty, is a maximum prison sentence of six (6) years or a maximum fine of €81,000 for private persons and for legal entities fines up to 10% of the total turnover. Where the bribed official does not act contrary to his or her duties, the maximum term of imprisonment is two (2) years and the same maximum fine. The punishment for active and passive private commercial bribery is a maximum prison sentence of two (2) years or a maximum fine of €81,000 for private persons and for legal entities fines up to 10% of the total turnover.
  • Furthermore, work related bribery is criminalised with the law requiring that the bribed person conceals the bribery from his employer. Please note that a director can be held liable for employees of the company who accept bribes.
  • Please note that it is expected that Dutch legislation will be tightened in the near future. In addition, please be aware that the Foreign Corrupt Practices Act and the UK Bribery Act as well as the OECD guidelines may apply to Dutch entities.

Latest version updated 10th April 2018

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