LIABILITY OF SHAREHOLDERS, DIRECTORS AND DIRECTORS-IN-FACT UNDER THE LAWS OF THE NETHERLANDS ANTILLES
Several grounds for liability
Under Netherlands Antilles law a company is recognized as being a separate legal entity for whose debts its shareholders are not liable. This is laid down in legislation. The Civil Code provides explicitly that shareholders are not personally liable for the liabilities of the legal person, except when the law provides otherwise.
Under Netherlands Antilles legislation, it is possible for shareholders of a company to opt for voluntarily being held liable for its debts. For instance, the articles of private limited liability companies may provide that holders of shares or a specific class of share shall be personally liable for certain or all liabilities of the company (article 2:202, paragraph 5 Civil Code). Another example would be one in which a parent company voluntarily assumes liability for debts of its subsidiary by entering into an agreement with the subsidiary’s creditor(s) or by issuing, for example, a strong letter of comfort.
Also a claim may arise out of statutory liability. Under Netherlands Antilles law, a managing director may be held liable to the company if he has not acted with due care. Case law says that a managing director is only liable if he has seriously failed in the performance of his duties. This is determined on the basis of all relevant circumstances, such as the competence and due care that is expected from a managing director who is prepared for his duties and fulfils them in good faith.
Any person who has determined the policy of a company as if he were a director can, pursuant to article 2:16 of the Netherlands Antilles Civil Code, be held liable by the bankruptcy trustee of the company for the deficit in the bankrupt estate of such company, provided that there has been mismanagement and this was an important cause of the bankruptcy. Such a director-in-fact may, under certain circumstances, include a parent company, if it has directly interfered with and put aside the subsidiary’s actual board of directors.
Also, the shareholders’ liability for debts of his company (its subsidiary) may be based on tort (article 6:162 Civil Code). In case of tort, the creditor has a direct claim on the shareholder for damage suffered as a result of the tort.
Finally, liability may arise from identification as discussed earlier in this blog. It entails ignoring the difference between the legal entity of the shareholder and its subsidiary, which results in substituting the subsidiary by its parent. This results in the parent company being held fully liable for the acts of its subsidiary, the shareholder is directly liable towards the subsidiary’s creditor for the subsidiary’s debt.
Karel Frielink
Attorney (Lawyer) / Partner
