Inquiry procedure within a foundation

Right of inquiry for foundations

Article 2:344(b) BW provides that the right of inquiry applies to a foundation that operates a business for which the law requires the establishment of a works council. In principle, a works council must be established if the business employs 50 or more employees. Because of the limited scope, inquiry proceedings occur less often in foundations than in NVs or BVs.

Authority to institute an inquiry

Not everyone may file an application for an inquiry with the Enterprise Chamber. Within a foundation, this right is held by the foundation itself, the person to whom the right is granted by the articles of association or an agreement and the Advocate General (in the public interest). In addition, the board members of the foundation, a supervisory body or any other person to whom the right is granted by the articles of association are also authorised. A bankruptcy trustee may also apply for an inquiry in the event of the foundation’s insolvency.

Course of the procedure

The Enterprise Chamber will allow the application if there are well-founded reasons to doubt proper policy. If the Enterprise Chamber believes that there are well-founded reasons to order an investigation, it will appoint investigators. The task of the investigators is to examine the policy and course of affairs in the foundation under investigation. Based on their findings, the investigators will draw up a report, after which the parties will enter the second phase of the inquiry procedure and debate whether mismanagement has occurred.

If the outcome of the investigation does indeed reveal mismanagement and the Enterprise Chamber accepts this conclusion, it may impose definitive measures within the foundation. Examples of such measures include dismissal of board members, annulment of resolutions, appointment of temporary board members, derogation from certain provisions of the articles of association and dissolution of the foundation.

For more detail on the procedure, see our page on the right of inquiry.

Provisional measures

The Enterprise Chamber has the power to impose provisional measures during the procedure if required by the state of the foundation or in the interest of the investigation. Examples of such measures include the suspension of board members and the appointment of temporary board members.

Mini-inquiry and powers of the investigator

Because of the limited possibilities to request an inquiry procedure under Article 2:346 BW for a foundation, the interim measure is sometimes used in practice to conduct an investigation within a foundation. This involves an investigation carried out by a temporary officer appointed by the court – a temporary board member or administrator – in connection with a request for the dismissal of one or more board members of a foundation under Article 2:298 BW, also known as the ‘mini-inquiry’. The power to do so is not expressly set out in the law, but derives from the court’s power to make interim arrangements for the board under Article 2:298(2) BW. For an example of such a ‘mini-inquiry’, see this judgment.

Another way to involve a foundation in an inquiry is to request authorisation from the Enterprise Chamber, in the context of an investigation into a company affiliated with the foundation, to grant access to documents of the foundation where there is a closely related legal entity (Article 2:351(2) BW).