Directors of Dutch legal entities are usually not personally liable for its operations, but there are exceptions. Find out what they are.
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Usually not personalAre you a director in a Dutch private limited company (bv) or public limited company (nv)? Or are you a committee member for a foundation (stichting) or an association (vereniging)? Then you are usually not personally liable for the organisation’s operations. The legal entity is liable itself. There are a few exceptions to this rule.
If you fail to perform your duties as a director, the legal entity can hold you responsible for any damages. This is called ‘internal directoral liability’, and it can be invoked in cases of ‘serious reproach’. For instance, if you jeopardise your association or company by seriously neglecting your financial responsibilities, or if you enter a loan at an exorbitant interest rate. An association or foundation could even go bankrupt as a result of incompetent directorship. In that case, the directors can be held privately liable for the debts.
You may also be personally liable for the fulfillment of debts to third parties. This is called ‘external directoral liability’. This applies, for instance, if the legal entity goes bankrupt as a result of your failure to perform your duties correctly.