This article has not yet been legally reviewed. The information is general and does not replace assessment of your individual circumstances.
Directors and shareholdersYour company wants to rent business premises that you own privately. Or another director wants work performed by a business in which they have a personal interest. The agreement may serve a business purpose and still raise a conflict-of-interest question. Examine not just the price and signature, but also who assesses the interests and who may participate in the decision.
This guide concerns a Dutch private limited company, a bv, and preparation for a specific transaction. Its main sources are Article 2:239 of the Dutch Civil Code (BW) and the Supreme Court’s interpretation of 10 April 2026, ECLI:NL:HR:2026:592. That ruling concerned several directors and a company without a supervisory board. It does not prescribe the outcome for every organisation or agreement. This article does not calculate a commercial rent, tax consequences or personal liability.
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1. Describe the personal interest and transaction first
Do not start by concluding that a director is trustworthy or suspicious. Describe the parties to the agreement, the director’s role and their personal interest in its terms. A private landlord may want rental income and security, while the company needs suitable, affordable premises. A relationship with another business can also raise questions, but holding two positions is not itself a complete legal assessment.
Article 2:239(5) BW requires directors to act in the interests of the company and its associated business. According to the Supreme Court, a conflict exists where interests are so incompatible that reasonable doubt arises whether the director is guided exclusively by those corporate interests. All relevant circumstances matter. Investigate the personal interest specifically: suspicion or a job title does not replace that assessment.
Prepare a short transaction note identifying the parties, ownership, proposed terms and available alternatives. Record what remains unknown too. For privately owned premises, duration, maintenance, termination options and financial commitments may matter alongside rent. This inventory neither proves nor removes a conflict. It shows what the competent body needs to assess.
2. Do not leave a possible conflict solely to the person concerned
In 2026 the Supreme Court described how a board with several directors and no supervisory board should handle a possible conflict. The director concerned should be as open as possible and disclose the possible interest to fellow directors. If opinions differ, in that situation the other directors decide whether an actual conflict exists. The director concerned does not decide that alone.
The ruling also states that the other directors have this responsibility even if the possible interest was not disclosed. This is not permission to exclude a colleague without investigation. Establish the relevant circumstances and different positions. Record the subject to which the assessment relates and why the interests are or are not considered incompatible.
A practical disclosure might read: ‘The company is considering renting my privately owned premises. I would be its landlord personally. The proposed terms and alternatives are below; please discuss how my interest should be assessed and how the decision should be organised.’ This illustrates openness, not legal approval. Supply available documents and avoid making a final commitment on the company’s behalf while the decision-making route remains unresolved.
3. Arrange abstention from deliberation as well as decision-making
Where an actual conflict exists, Article 2:239(6) BW excludes the director from deliberation and decision-making on that subject. Merely abstaining from voting does not fully describe the rule. In the situation addressed by the Supreme Court, the other directors must also ensure that the person concerned actually takes no part in that discussion and decision.
Define the scope practically. Identify the proposal, available documents, participants for that agenda item and how questions will be handled. The rule concerns that subject; the ruling does not automatically exclude a director from all other board business. Other capacities and rights, such as those of a shareholder, require separate consideration.
Keep a factual record. Include the disclosure, interests investigated, reasons for the assessment and actual participants in the decision. Do not retrospectively record someone as absent if they joined the discussion. Minutes record the actual process; they cannot change past events. If facts or applicable rules are disputed, obtain focused advice before implementing the transaction.
4. Check who decides if the board cannot
The law supplies a further route when a conflict prevents a board decision. The supervisory board then decides. If there is no supervisory board, the general meeting decides, unless the articles of association provide otherwise. Check the actual governance structure and current articles before appointing a substitute.
This route can matter where there is one director and no supervisory board. It can also matter where several directors are affected and the board consequently cannot decide. A shareholder or adviser attending an informal conversation does not turn it into a decision of the proper body. Prepare the subject, participants and required records carefully. The guide to the general meeting discusses its formal preparation separately.
| Situation | Decision-making route to examine | What not to assume |
|---|---|---|
| Other directors can still decide | Assessment of the interest and decision by competent directors without the conflict | That the person’s own assessment alone suffices |
| The board consequently cannot decide and a supervisory board exists | The statutory further route and that board’s formal role | That an external adviser automatically acts as a supervisory director |
| The board consequently cannot decide and no supervisory board exists | General meeting under the statutory default, unless the articles provide otherwise | That an ordinary email written as director replaces every missing decision |
This is a preparation map. It does not establish compliance with all quorum, voting, consultation or other decision requirements in your company. The 2026 ruling answered a question for its stated board structure; do not copy its answer to a foundation, foreign business or different governance model without checking.
5. Distinguish decisions from representation
Proper internal decision-making and authority to represent the company towards the other party are different questions. Article 2:240 BW governs representation. The board represents the company; in principle each director also has representative authority, subject to the options for provisions in the articles described there. Check the articles, relevant register information and any powers of attorney separately.
Do not infer from a defective internal decision that an already signed contract automatically ends. Conversely, an authorised representative’s signature does not itself make the internal process careful. The consequences of an error require a separate assessment of the applicable rules and facts. In an existing dispute, examine communications and performance that have already occurred too.
| Document or question | Function in the file | Does not automatically replace |
|---|---|---|
| Disclosure and reasons | Showing why participation in deliberation is being examined | The final decision on the transaction |
| Decision of the competent body | Recording whether and on what terms the company wishes to transact | Checking external representative authority |
| Contract and signature | Recording the agreement and action on the parties’ behalf | Required internal decision-making |
| Written record in a sole-shareholder situation | Examining whether Article 2:247 BW also applies | All other company-law and contractual checks |
If unsure, use the separate guide to signing authority to organise the authority documents. This page predicts neither whether an agreement can be challenged nor the outcome of a damages claim against a director.
6. With one shareholder, check written-record requirements too
Where one person fulfils several roles in a company, Article 2:247 BW may matter alongside the decision question. It requires written recording of the transactions it describes between the company and the holder of all its shares where that shareholder represents the company. It also describes a matrimonial or registered-partnership community situation and rules on which shares count. First establish whether the provision covers your situation.
There is an exception for transactions which, on the agreed terms, form part of ordinary business operations. Calling an agreement ‘ordinary rent’ does not automatically bring it within the exception. Examine both the nature of the transaction and its actual terms. If required written recording is missing, Article 2:247 provides for possible avoidance for the company’s benefit; it does not say every oral arrangement in this setting is automatically void.
A signed contract may be important, but also identify the capacity in which each person acts and the preceding decision. Record the exact version, annexes and agreed terms. A later account must accurately describe what happened earlier. It must not invent prior approval or an incorrect signing date.
7. Fictional example: Noor rents her premises to her company
In this invented example, Noor is director and sole shareholder of a company without a supervisory board. The business is growing and wants to rent her privately owned premises. She has gathered a draft agreement and a price indication. Nearby alternative premises are cheaper but smaller and less suited to the activities. That comparison matters commercially but does not independently determine whether a conflict exists.
Noor therefore has the different interests and appropriate decision route examined, considering her private position, the company’s needs, the terms and articles. If an actual conflict prevents a board decision, the statutory and articles-based further route must be followed. Her shareholder capacity and the way a general-meeting decision is made are recorded separately.
Representation and the possible written-record requirement under Article 2:247 are then checked. A commercial price indication or Noor’s ownership of all shares cannot alone establish the outcome. This fictional file determines no actual validity, tax treatment or liability. It shows why someone with several roles must make their separation visible.
8. A market-rate price does not replace the process
The strongest practical objection is often that the agreement seems favourable to the company and extra discussion takes time. A good price and workable alternatives are indeed relevant circumstances. But the conflict question also concerns whether corporate interests can be protected without bias. Examine both the substantive terms and participation in decision-making.
A price comparison omitting duration, maintenance or other obligations may also be incomplete. Show which elements are comparable and which assumptions are used. Experts should make statements only within their actual instructions. An estate agent’s rental-value advice, for instance, is not itself a legal assessment of the board decision.
If the contract has already been signed, preserve the original file and obtain focused advice on possible consequences. Do not alter earlier documents to make the process appear problem-free retrospectively. This guide supplies no standard corrective resolution or deadline calculation. In a dispute, take the decision process, representation and actual performance together to your adviser.
9. Bring a concrete decision file
A useful file distinguishes the possible personal interest, its assessment, the competent body and implementation. Identify open questions rather than asking only whether someone may sign. These materials assist preparation without guaranteeing a legal outcome:
- Current articles and a description of directors, any supervisory board and shareholders.
- Parties, roles and personal interests in the proposed transaction.
- Draft agreement, relevant annexes and an overview of alternatives.
- Disclosure, different positions and reasons regarding the conflict.
- The actual decision and evidence of participants and their capacities.
- Representation documents and any written records with clear versions.
A focused question is: ‘Who may decide on this transaction in this governance structure, and what documents are missing before anyone signs for the company?’ For ongoing reporting and meeting arrangements, see the guide to allocation of board duties and supervision. Rules of procedure support the actual process; they do not by themselves establish that a particular decision is legally valid.
Sources and scope
Articles 2:239, 2:240 and 2:247 BW were consulted in the version of Book 2 displayed on Overheid.nl, effective from 1 July 2026. ECLI:NL:HR:2026:592 is a ruling of 10 April 2026; this article does not present it as a ruling issued today. Practical government guidance on governance and supervision was also compared. All sources were consulted on 26 October 2026. Factual and legal examination of your own articles and transaction remains separately necessary.
Legal status: this text has not yet been reviewed by a legal professional or lawyer. It provides general information and does not replace assessment of your circumstances.
Frequently asked questions
Does every contract with a director automatically involve a conflict?
A personal interest or two roles does not alone establish that. Examine all relevant circumstances and whether the interests are so incompatible that impartial protection of corporate interests can reasonably be doubted.
May the director concerned alone decide whether to participate?
For a multi-person board without a supervisory board, the Supreme Court held that the other directors decide if opinions differ. Where a conflict is established, they must also ensure that the person concerned does not participate in the relevant deliberation and decision.
Who decides if a board decision consequently becomes impossible?
Article 2:239(6) first names the supervisory board. If absent, the general meeting acts under the default rule, unless the articles provide otherwise. Check the actual structure and decision requirements.
Does an error in a board decision automatically end the contract?
Do not assume that without separate assessment. Internal decision-making, external representation and the consequences of an error are different questions. Preserve correspondence and actual contract performance too.
Is a written record always required with one shareholder?
Check whether the precise situation falls under Article 2:247. The law includes an exception for transactions forming part of ordinary business operations on their agreed terms. Merely describing an arrangement as commercial or usual does not answer that test.
Sources
These sources relate to this page. For a specific case, check current rules and your own documents.
- BW Boek 2, artikel 247: schriftelijke vastlegging bij de enig aandeelhouder Accessed: 2026-10-26
- BW Boek 2, artikel 240: vertegenwoordiging van de bv Accessed: 2026-10-26
- Hoge Raad 10 april 2026, ECLI:NL:HR:2026:592, rechtsoverwegingen 3.2.2–3.2.3 Accessed: 2026-10-26
- BW Boek 2, artikel 239: belang, onthouding en vervolgbesluit Accessed: 2026-10-26
Legal review
Not legally reviewed yetThis version has not been reviewed by a lawyer or legal professional. Checking sources or editing text is not legal approval.
Editorial team Business law in the Netherlands
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