# A foreign parent instructs the Dutch board to act against its own judgment while insolvency is already in sight
You have three options when a parent's instruction looks wrong: execute it and record dissent, decline and act on your own judgment, or force the issue to a vote or a court. Insolvency proximity turns this governance disagreement into a personal liability question for each director. The path you choose fixes the deadline that runs against you.
What happens if you do nothing
Doing nothing usually means continuing to follow the parent's instruction without recording any objection. The instruction is carried out, the group relationship stays intact, and no immediate friction appears anywhere on the record. But once insolvency was foreseeable at the time of the act, that silence removes your strongest defence: that you turned your mind to the company's own interest and said so. A curator (bankruptcy trustee) appointed later reconstructs the board's conduct from what was minuted, and an unminuted objection is treated as no objection at all. This risk profile, common to situations of insolvency near the point of default, escalates with each day the instruction stands unrecorded.
The routes
| Route | What it takes | Time | Cost driver | What it gives you |
|---|---|---|---|---|
| Execute and record dissent | A board resolution documenting your objection and the advice taken before complying | Same board meeting | The advice taken, not the act itself | A record that you turned your mind to the company's interest, without stopping the act |
| Decline and act on your own judgment | An alternative resolution grounded in the company's own interest, notified to the parent in writing | Days rather than weeks | Risk of removal and the cost of resisting it | A stronger liability defence, at the price of open conflict with the shareholder |
| Force the issue to a vote or a court | Convening the general meeting, or bringing interim relief or an inquiry request | Weeks, driven by notice periods and listing | Court fees and proceeding costs, no confirmed figure applies here | A binding decision that fixes responsibility and closes the argument |
What decides between them
Where the instructed act is itself a management fee paid to a parent with no employees of its own, the liability question compounds: see a holding company with no employees paying management fees. Four factors otherwise move you between routes. How far the act damages the company or favours the parent over other creditors weighs heaviest. How close insolvency actually is, foreseeable against already present, changes the standard your conduct is measured against under Dutch law. Whether the parent gave the instruction informally or through a shareholders' resolution changes what a formal challenge looks like. If the instruction is part of a wider reorganisation rather than an isolated act, the analysis changes further: see a group reorganisation that needs a shareholder vote you may lose.
The deadline that runs
No fixed number of days is set for the decision itself. The exposure is a moving window: liability for what was foreseeable begins to accrue from the moment you recognised, or should have recognised, that insolvency was in sight, and it runs for as long as the instructed conduct continues. If you intend to challenge the instruction through kort geding (interim relief proceedings), courts read delay as acceptance; bring the application while the conduct is still ongoing, not after it has taken effect. Waiting for the annual accounts or the next scheduled board meeting is not a deadline a Dutch court will respect.
Evidence to secure now
Keep the instruction itself, in writing where it exists, and the minutes of the meeting where it was discussed. Record the balance sheet and liquidity position at the moment the instruction was given, not a later reconstruction. Keep the advice you obtained and the date you obtained it: advice sought after the act carries far less weight than advice sought before it. Check too that the register itself reflects the current board accurately: a director who resigned but is still shown as such carries an exposure of its own, addressed in you resigned but the register still shows you as director.
Cost drivers
The court fee for interim relief proceedings and for a bankruptcy petition is set by the court and changes periodically; no confirmed figure is available for this page. What drives the total is the route chosen, not the underlying dispute: contested proceedings cost more than an uncontested filing, and an inquiry request to the Ondernemingskamer (Enterprise Chamber) runs on its own separate scale. Any of these applications is conducted with Dutch-qualified counsel of record; the advice needed to build a defensible record before any of them is a matter of hours, not a fixed fee.
What we would do in the first week
Establish the balance sheet and cash flow position as of today, not as of the last filed accounts. Set out in writing what the parent instructed, when, and through what channel. Take independent advice on whether the instructed act is defensible on the company's own interest, before it is carried out rather than after. If the ownership chain above the Dutch entity in the Netherlands is unclear, settle that before writing anything to the parent.
What this does not cover
- Criminal liability of directors, which follows separate rules.
- The parent's own insolvency position under its home jurisdiction.
- The tax treatment of the instructed act itself.
- Situations where the company is already in formal insolvency proceedings; the position changes once a trustee is appointed.
Questions
Can a foreign parent legally instruct the Dutch board to act against its own commercial judgment?
A shareholder can propose or resolve on policy matters, but the board keeps the statutory duty to act in the company's own interest. An instruction the board judges harmful does not override that duty; it only raises the stakes of complying with it.
What happens to the board's liability if it follows the parent's instruction and the company later fails?
Liability turns on what the board knew and did at the time, not on who gave the instruction. A documented objection, taken advice, and a recorded balance sheet position are what a curator (bankruptcy trustee) looks for afterwards.
Is refusing the parent's instruction a realistic option for a Dutch subsidiary board?
It is realistic, but it usually triggers open conflict with the shareholder, including the risk of removal from the board. What should decide whether that conflict is worth the stronger liability defence is set out above.
Closing
This disagreement sits inside corporate law and governance once it stops being commercial and becomes a governance question. Our board and governance work addresses exactly this fork, from documenting dissent to escalation. Where the parent's own structure or a layer above it is unclear, an ownership chain report for a Malaysian parent sets out the chain before you respond. A structure report maps the company's ownership and control lines at one of four fixed tiers, without a bespoke calculation.
Author: Eva Kuipers, Governance and the Enterprise Chamber. Eva works on board disputes, shareholder deadlock and inquiry proceedings before the Enterprise Chamber.
Last legal review: 2026-10-01