Exit rights of minority shareholders in a private limited company

PhD ceremony: dhr. P.P. de Vries, 16.15 uur, Academiegebouw, Broerstraat 5, Groningen

Thesis: Exit rights of minority shareholders in a private limited company

Promotor(s): prof.dr. L. Timmerman, prof.dr. J.B. Wezeman

Faculty: Law

Contact: Paul de Vries, 010-217 2920 (work), ppdevries@hotmail.com

The problem of the minority shareholder that is locked into the company is one of the universal problems in company law. In many legal systems, the legislator attempted to solve this problem by introducing winding-up remedies, oppression remedies and appraisal rights. The study of Paul de Vries focuses on these statutory exit rights, in particular Dutch statutory exit rights available to minority shareholders in a private limited company.

De Vries explains why the introduction of a statutory exit right at will is not desirable. Subsequently, the relevant European rules are explored. Attention is paid to the right of property (Art. 1 First Protocol ECHR), the right to a fair trial (Art. 6 ECHR) and the proposal on the European private limited company (SPE). The topic of statutory exit rights lends itself particularly well for comparative research. Therefore, much attention has been paid to the German and English exit rights and debates in these countries about exit rights.

The Dutch section of this study starts with the winding-up remedy, one of the final remedies that can be ordered under the inquiry proceedings. In addition, it is explained how the inquiry proceedings are used to create an exit for shareholders. Subsequently, the Dutch exit proceedings are investigated and several interesting recommendations are made. It is recommended introducing the statutory rule that an irrevocable, unconditional and fair buy-out offer bars a claim under the exit proceedings. Moreover, the study promotes limiting the exit proceedings to one factual instance. In addition, the study deals with the current Dutch appraisal rights and the debate on introduction of additional appraisal rights. Finally, twenty recommendations are made for the improvement of the Dutch statutory exit rights.

Paul de Vries (Meppel, 1977) read Dutch law and Notarial law at the University of Groningen. Subsequently, he was lecturer and PhD researcher in the Department of Business law and Labour law at the University of Groningen’s Faculty of Law. Paul de Vries practices as a candidate civil-law notary (senior associate) at Houthoff Buruma.