Conflicts of interest can arise in very many places. In the case of the BV, NV, cooperative and association, the law has special regulations for when there is a managing director, supervisory director and the legal entity. It is important to know these rules, as acting contrary to these rules may lead to liability or lack of decision-making power.
A conflict of interest exists if a director enters into a transaction with the BV of which he is a director. But also if the PLC sells something to a director's son.
Until 1 January 2013, the law stated that the company was not represented by the management board or a director in case of a conflict of interest. In many cases, however, the articles of association contain a provision on conflict of interest. With old articles of association (from before 1 January 2013), this is often an arrangement that is in conflict with current company law.
A director who has a conflict of interest may not interfere with decision-making on the relevant subject. If no decision can then be taken, the supervisory board (SB), if any, may take the decision. If it too cannot take a decision, the general meeting decides. However, the management board remains authorised to represent.
For more information on conflict of interest, please contact us. We will be happy to help.
