Transfer of shares

The articles of association of a company determine whether shares are registered or to bearer. This difference is important for determining how shares are transferred. Bearer shares are shares for which the company has issued a bearer certificate. These shares can be transferred by simply handing over the bearer certificate.

A notarial deed, executed by a civil-law notary practicing in the Netherlands, where the parties involved are present, is required to transfer registered shares in a company not listed on the stock exchange.

The law stipulates the elements such a deed must include, i.e.

• The title of legal act, respectively legal basis, on which the transfer is based (e.g. a purchase contract, a gift agreement or an exchange);
• The way in which the seller acquired the shares;
• The details of the natural and/or legal entities that are a party;
• The number and the class of shares to be transferred;
• The details of the company whose shares are involved in the legal act.

The notarial deed of transfer makes the acquirer the shareholder. However, he can only exercise the rights connected to the share after the company has acknowledged the transfer or after the deed has been served to the company. To transfer registered shares in a company listed on the stock exchange a deed (notarial or private) as well as an acknowledgment in writing from or a service of the deed to the company.

The civil-law notary who draws up the deed is obliged to conduct a title search; he has to investigate and record in the deed if and if so, how, the seller acquired the shares. This should be recorded in the shareholders’ register if this has been kept up-to-date properly. Any transfer of shares has to be recorded in the shareholders’ register. However, the validity of the transfer is not affected by this.

The following details have to be recorded in the shareholders’ register:

• The names and addresses of all shareholders;
• The amount paid on each share;
• Discharge of liability for payments not yet effected (if applicable);
• The date on which the shareholder acquired the shares;
• The date of acknowledgement by or service to the company.

If as a result of the transfer of shares, all shares in the company are held by one person or if the sole shareholder ceases to be sole shareholder, the company shall notify the trade register thereof. If all shares are held by spouses married in community of property, the company is considered to have a sole shareholder.