Survey procedure at the Enterprise Chamber, here's how it works

In corporate law, the Enterprise Chamber of the Amsterdam Court of Appeal plays an important role in settling disputes between shareholders, directors and the company itself. One of the instruments of the Enterprise Chamber is the right of inquiry and the procedure associated with it. The inquiry procedure allows for an investigation into the affairs of a company. The purpose of this procedure is to restore relations within the company, for example by shareholder disputes solve or break a decision-making deadlock. 

Who sets up the procedure? 

The inquiry process is a application procedure which begins at the request of shareholders or stakeholders of the company. Alternatively, the company itself can initiate inquiry proceedings. In the event shareholders petition the Enterprise Chamber, they must represent at least 10% of the issued capital. In addition, an association of employees is an example of a stakeholder holding the right of inquiry. Furthermore, persons designated by the articles of association, to whom the power to do so has been granted, may also file a request. The company itself may also submit a request to the Enterprise Chamber to initiate inquiry proceedings. Finally, it is required that the applicant has already made the objections, which are the core of the request, known to the management board and the supervisory board. 

First stage of survey procedure

If the applicant is competent and admissible, the Enterprise Chamber starts the inquiry procedure. The first question the Enterprise Chamber answers is whether there are valid reasons to doubt correct policy. This is readily the case if legal or statutory rules are not complied with or if board members or supervisory directors are dysfunctional. Shareholder disputes and decision-making impasses can also be valid reasons to doubt a correct policy. If this is the case, the Enterprise Chamber appoints an investigator. This investigator examines the course of events within the company and draws up a report of his findings. 

Second stage of the inquiry process

Based on the investigator's report, the Enterprise Chamber determines whether there was actually mismanagement within the company. According to the Supreme Court, mismanagement is present if directors, supervisory directors or shareholders are very careless or seriously culpable have acted. The Enterprise Chamber can take very drastic measures in that case. 

Provisional and final provisions

At any point in the inquiry proceedings, a preliminary injunction may be granted by the Enterprise Chamber at the request of the lawyer of one of the parties involved in the inquiry proceedings. An important condition for this is that an urgent interest exists. With a preliminary injunction, the Enterprise Chamber can suspend, dismiss or appoint directors or supervisory directors, or deny a shareholder the right to vote. After the second stage of the inquiry procedure, the Enterprise Chamber can also pronounce these provisions permanently. Decisions can also be annulled and, as a last resort, the company can even be dissolved. The corporate lawyer at Lexys Lawyers can tell you more about the inquiry procedure and resolving disputes within a company.