binding nomination

In a Dutch corporation normally the shareholders’ meeting appoints the board of directors. The articles of association A document, drawn up when a Dutch company or legal person is set up, and which regulates the operations of the company and defines its purpose.
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Articles of Association
may however stipulate that the appointment of a director takes place by nomination. This is called a binding nomination as the shareholders’ meeting must then appoint the nominated person. Another body of the company or even a third party such as the State can be authorised to nominate candidates.

If the binding nomination only consists of one name, a positive decision of the shareholders’ meeting will result in the appointment of that sole candidate.

The shareholders have to appoint according the nomination. Under circumstances they can, however, remove the binding nature of such nomination. This requires a resolution supported by at least 2/3 of the casted votes while this 2/3 majority also has to represent more than half of the subscribed capital.

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