Beware of excessive attendance requirements for association statute amendments; what now?

Amendment of articles of association in associations

An association's articles of association contain the rules that members must adhere to. The notary records the articles of association upon the association's incorporation and can later amend them by notarial deed. Amending the articles of association after incorporation may be desirable to steer an association in a different direction. In some cases, for example, when the association is part of an umbrella organization, the association may be required to amend the articles of association. This amendment must also take place before a specific date. A common problem in this situation is that membership attendance is too low, making it impossible to amend the articles of association.

Quorum and attendance requirement

Whether an association's articles of association are amended is decided by the members at the general meeting. The law stipulates that two-thirds of the members present must vote in favor of the amendment. The articles of association may also include stricter requirements for amendments, such as unanimity or an additional attendance requirement (also known as a quorum requirement). The attendance requirement stipulates that a certain percentage of the members must be present to reach a decision (in addition to the required majority). These conditions (combined) can result in the articles of association being unable to be amended repeatedly.

Example

A chess club has ten members. The chess club wants to merge with the draughts club. To do so, the articles of association must be amended. The chess club's articles of association stipulate the following requirements for amending the articles of association:

• At least half of the members must be present at the meeting.

• The decision must be taken by a majority of at least 67% of the votes.

Three out of ten members attend the general meeting to vote on amending the articles of association. Two votes in favor (67%). However, the decision cannot be legally passed because less than half of the members were present at that meeting. At a subsequent meeting, the attendance requirement is met, but not the required increased majority (67%). Only at the third meeting are both requirements met.

If an attendance requirement is persistently not met, the court can assist. However, the court does not have the authority to amend the association's articles of association (this is different for foundations). The association can, however, request the court to temporarily suspend an attendance requirement or a reinforced majority (or both) so that the decision can still be made. An example of this is a ruling by the District Court of North Holland on August 5, 2024. The association's articles of association had to be amended before January 1, 2025, but it was practically impossible to decide this because the association's articles of association contained a majority requirement combined with an attendance requirement. The court ruled that the decision could still be made at the next meeting, regardless of attendance. While the court can assist, it is better to stipulate in the articles of association that an attendance requirement does not apply to a second meeting if it was not met at the first meeting. Ask your notary about the options for adopting the articles of association.

Prevention is better than cure

An association's articles of association may contain obstacles to amendment, such as (too) high majority requirements and/or attendance requirements. If it is permanently impossible for an association to amend the articles of association, the court can, upon request, remove a restrictive condition from the articles of association. To prevent your association from ending up in such a situation, it is also possible to take action now. We can advise you on this when drafting or amending the articles of association.

Would you like more advice on this topic? Contact us. Call us at +31 (0)10 44 53 777 to schedule an in-office meeting or a video call. We look forward to seeing you.

This article is taken from 'Notariskrant', a product of FBN Juristen. This article should not be considered legal advice. FBN Juristen and MAES notarissen take the utmost care with the content of these articles but accept no liability for any incompleteness or inaccuracy of an article, nor for any consequences thereof.