LEGAL MERGERS IN THE NETHERLANDS ANTILLES
The Corporate Code provides for a simplified merger procedure
The acquisition of a business enterprise may take place through the purchase of shares (take-over), the purchase of assets and liabilities or a legal / statutory merger. The Netherlands Antilles Code on corporate law and other legal persons (the Code) contains detailed provisions for mergers of companies limited by shares (NV) and private limited companies (BV).
Basically, a legal merger entails the absorption of one legal entity by another in exchange for shares, or even without such exchange. The absorbed entity ceases to exist. A legal merger requires a notarial deed. Legal mergers may take place between a.o. NVs and BVs. Under Netherlands Antilles law, a cross-border legal merger is only possible if the acquiring entity is a Netherlands Antilles legal entity and the law governing the foreign legal entity does not prohibit the merger.
Article 2:333 sub 3 of the Code provides for the possibility to limit the formalities. If all shareholders (who have voting rights) have voted in favor of the merger, certain formalities can be disregarded. If they have thus voted for a legal merger, there is no need for a merger proposal containing:
(a) a share converting ratio;
(b) a start date as of which and the extent to which the shareholders of the companies ceasing to exist will share in the profit of the acquiring company; and
(c) a merger balance sheet of the acquiring entity.
There is no need for explanatory notes regarding the method of conversion and the result of such valuation. There is no need for a fairness opinion regarding the merger proposal, conversion rate and merger balance.
The simplified merger procedure is also applicable in the case of an up-stream merger, i.e. a parent company acquiring (absorbing) a subsidiary, and in the case of a legal merger between affiliated companies, provided that all the shares in both companies are held by one person and the acquiring company shall not allot shares.
Karel Frielink
Attorney (lawyer) / Partner
