HOW TO CONTROL SUBSIDIARIES?
The articles may provide for an instruction right
I received a question about controlling one’s subsidiaries. I assume that the (Netherlands Antilles) holding owns the majority of shares in the subsidiaries.
In general, it is the (managing board of a) holding company that exercises voting rights attached to the shares in its subsidiaries, i.e., the holding in fact is the general meeting of shareholders of such subsidiaries.
If the holding company wants a subsidiary to carry out its wishes or policies, than either the holding company should be the managing director of such subsidiary or the managing board of the subsidiary should consist of people who are willing to carry out said wishes and policies. Finally, the articles of the subsidiaries may provide that the general meeting of shareholders shall have the right to instruct the managing board to carry out its instructions.
Karel Frielink
Attorney (lawyer) / Partner
