Reinier advises national and international companies
reinier.russell@russell.nl +31 20 301 55 55When tensions run high within a company, potentially putting the company at risk, this may be a reason to go to the Enterprise Chamber to start inquiry proceedings. Who can exercise the right to file an inquiry request?
In the second part of the Right of inquiry series, we discuss who can file a request for an inquiry with the Enterprise Chamber. Not everyone has the right to file an inquiry request. The legislator deliberately wanted to prevent any arbitrary person from going to the Enterprise Chamber. Which groups and individuals can, however, file a petition for inquiry?
Shareholders and depositary receipt holders are only entitled to file a request for an inquiry if they alone or together hold a certain percentage of shares or a certain value of shares. The amount of this percentage or value depends on whether the amount of the issued capital of the legal entity is higher or lower than EUR 22.5 million.
It does not matter whether the shareholders and depositary receipt holders own the shares or depositary receipts directly or through another legal entity, such as a holding company. For example, a shareholder owning 10% of the capital in a holding company can file an inquiry into a company that is 100% owned by the holding company.
In the case of a legal entity with an issued capital of less than 22.5 million euros, shareholders and holders of depositary receipts with 10% of the issued capital can submit a request to the Enterprise Chamber. In addition, holders of shares or depositary receipts with a nominal value of EUR 225,000 can also go to the Enterprise Chamber. A lower amount can be included in the articles of association.
For larger companies, with an issued capital exceeding EUR 22.5 million, the legislator has lowered the threshold to 1% of the issued capital. Shareholders or holders of depositary receipts holding 1% can therefore independently go to the Enterprise Chamber with a request for an inquiry. Shareholders owning shares worth EUR 20 million at the time of the request also have this right. The articles of association can reduce this amount.
The Dispute Settlement Procedure Amendment and Clarification of Admissibility Requirements Survey Procedure Act (Wagevoe), adopted by the Senate on 4 June 2024, gives shareholders or depositary receipt holders of listed companies the right to file a request for an inquiry if they hold at least 1% of the issued capital or shares worth EUR 20 million. This is already the case for companies with more than EUR 22.5 million in issued capital, but will apply to all listed companies after the Act comes into force. The new regulation is especially important for listed companies whose shares have a low nominal value but a high market capitalisation. When the law will take effect is not yet known.
Members of an association, which maintains an undertaking with at least 50 employees, a cooperative and a mutual insurance company, may submit a request for an inquiry. An inquiry request must be submitted by at least 300 members or 10% of the total number of members or the members representing 10% of the votes at the general meeting of members. A high threshold therefore applies to members. With this, the legislator wants to prevent members from simply going to the Enterprise Chamber.
In addition to the shareholders of a legal entity, a commercial legal entity itself may also go to the Enterprise Chamber to investigate the affairs of the legal entity. In addition to the legal entities already mentioned, this also includes the foundation that maintains a company with at least 50 employees. Only the management board and the supervisory board or non-executive directors can submit a request for an inquiry on behalf of the legal entity.
The legal entity may, in the articles of association or in an agreement, give others the right to file a petition for an inquiry. This could include a statutory right for a foundation that aims to maintain the continuity of a company. It is possible here to grant such a right to different bodies or persons.
This way, a right to file an inquiry request can also be granted to the works council. Practice shows that this granting is particularly done when there is a conflict between management board/management and a supervisory body or shareholder(s). The works council represents the interests of employees and the company and can play a useful role with the right of inquiry in case of such conflicts.
Trade unions have the legal right to file an inquiry request, provided they have members who work as employees with the legal entity. If a trade union believes there is improper conduct of business in a legal entity, it can initiate proceedings before the Enterprise Chamber. Before taking this step, the union must first contact the works council of the relevant legal entity. The works council must respond to the union’s letter within a reasonable time. Hearing the works council beforehand is only mandatory for the union.
It is possible for a large group of persons and bodies at a legal entity to go to the Enterprise Chamber. However, there are requirements attached to this, to prevent that not anyone can just go to the Enterprise Chamber. The requirements for granting an inquiry request will be discussed in a subsequent blog.
Do you have a conflict within a company and want to know what your options are? Do you have questions about inquiry law or other forms of corporate litigation? Our specialists will be happy to assist you. Please contact us:
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