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Flexibility and Function of Private Company Statutes

Published online by Cambridge University Press:  19 April 2007

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Abstract

This contribution focuses on two themes: the function of private company statutes and their flexibility. It is recognised initially that private company statutes serve economic activities and purposes. In this instrumental role, they contribute to economic welfare. In addition, they have the function to serve legal certainty and to protect the justified interests of persons involved in a private company. This function is designed to promote fairness. Together these functions result in two types of rules in a private company statute: rules serving welfare, which are usually non-mandatory rules, and rules serving fairness, which are usually mandatory. The private company, as the object of these rules, has the internal characteristics of a partnership and the external characteristics of a corporate body. In addition, shareholders are financially and personally deeply involved in the private company and have no easy exit. These characteristics should be determinative for a private company statute. The author puts forward some suggestions for adjustments to the current Dutch proposal for a private company statute.

Type
Articles
Copyright
T.M.C. Asser Press 2007

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