Redemption Agreement Template for Netherlands

A Redemption Agreement sets out the terms and conditions for a company to buy back its own shares from shareholders in the Netherlands. It's commonly used when a business owner wants to exit, a shareholder retires, or during succession planning - laying out the price, timing, and process for the share transfer.

Under Dutch corporate law, these agreements must follow strict capital maintenance rules and shareholder approval requirements. The document typically includes valuation methods, payment terms, and conditions that protect both the company and departing shareholder. Many Dutch businesses include redemption provisions in their articles of association or shareholders' agreements.

Consider putting a Redemption Agreement in place when planning major changes in company ownership or shareholder structure in the Netherlands. This agreement becomes essential during retirement transitions, when shareholders want to exit the business, or when implementing succession plans for family-owned companies.

The agreement proves particularly valuable during unexpected events like shareholder disputes, divorce proceedings, or bankruptcy situations. Dutch companies often prepare these agreements proactively, well before any ownership changes occur - this helps avoid rushed negotiations and ensures compliance with corporate law requirements for share transfers and capital maintenance rules.

• Standard Share Redemption: Basic agreement for buying back shares at market value, commonly used in Dutch BVs (private limited companies)
• Mandatory Redemption: Triggered by specific events like retirement or death, with pre-set terms and valuation methods
• Optional Redemption: Gives the company flexibility to repurchase shares when desired, subject to shareholder approval
• Staged Redemption: Structures the share buyback in phases, often used for gradual ownership transitions
• Emergency Redemption: Contains special provisions for urgent situations like bankruptcy or shareholder disputes

• Company Board: Initiates and approves the Redemption Agreement, ensuring compliance with Dutch corporate law and capital maintenance requirements
• Departing Shareholders: Sellers whose shares are being redeemed, often retiring founders or exiting investors
• Corporate Lawyers: Draft and review agreements to ensure legal compliance and protect all parties' interests
• Financial Advisors: Help determine fair share valuation and structure payment terms
• Notaries: Required under Dutch law to execute and register share transfers and related corporate changes
• Remaining Shareholders: Must often approve the redemption and may have specific rights under the articles of association

• Company Details: Gather current articles of association, shareholder register, and corporate documentation
• Share Information: Document the number, class, and nominal value of shares being redeemed
• Valuation Method: Determine and document the agreed share valuation approach and price calculation
• Payment Terms: Specify timing, installments, and any security arrangements for the redemption
• Board Approval: Confirm proper authorization through board resolutions
• Legal Requirements: Check capital maintenance rules and shareholder approval thresholds
• Tax Implications: Document potential tax consequences for both company and departing shareholder

• Party Details: Full legal names and addresses of the company and selling shareholders
• Share Specifics: Precise description of shares being redeemed, including class and number
• Purchase Price: Clear valuation method and payment terms, including any installment arrangements
• Conditions Precedent: Required approvals, documentation, and legal compliance checks
• Transfer Mechanics: Process and timing for executing the share transfer
• Representations: Warranties about share ownership and authority to sell
• Tax Provisions: Allocation of tax liabilities and responsibilities
• Governing Law: Explicit reference to Dutch corporate law and jurisdiction

A Redemption Agreement differs significantly from a Business Acquisition Agreement. While both involve ownership transfers, they serve distinct purposes in Dutch corporate transactions.

• Transaction Structure: Redemption Agreements involve a company buying back its own shares, while Business Acquisition Agreements cover the sale of an entire business between independent parties
• Legal Requirements: Redemption Agreements must comply with strict capital maintenance rules and shareholder approval thresholds under Dutch law; Business Acquisition Agreements focus more on asset transfer and due diligence
• Scope of Transfer: Redemptions typically involve specific share blocks, whereas business acquisitions include assets, contracts, employees, and intellectual property
• Financial Impact: Redemptions use company funds and affect its capital structure directly; acquisitions usually involve external funding and maintain the company's capital intact