Kapitaalbescherming

Capital protection comprises the provisions of Book 2 of the Dutch Civil Code that require companies to maintain a minimum capital and reserves. These rules prevent the company’s equity from being eroded by dividend distributions or other distributions that would jeopardise the continuity of the business or the interests of creditors.

The regime is relevant because it affords protection to creditors and safeguards the company’s solvency. In the event of a breach, directors and shareholders may be held personally liable.

In practice, the civil-law notary or accountant verifies compliance with the capital-protection rules when amendments to the articles of association, dividend resolutions or capital reductions are effected.