SHAREHOLDERS’ LIABILITY UNDER THE LAWS OF THE NETHERLANDS ANTILLES
Shareholder influence doesn’t necessarily cause liability
Shareholders are not personally liable for the liabilities of a company. As we have seen in the previous posting, sometimes they can be hold liable though. However, the single fact that a shareholder provides a contribution to the policy and management of its subsidiary, or acts as the actual executive as if it were director of the subsidiary, is not enough to establish liability of that shareholder based on tort.
The same applies to instances where the parent company interferes with the operational management of the subsidiary, which does not automatically result in liability on the part of the parent company without personal culpability of the parent company or one of the parent company’s directors. There are many cases in which creditors of subsidiaries have argued that the shareholder of a subsidiary is liable for its debts on the basis of the simple fact that all shares in the subsidiary are held by one party or that such companies effectively form one single economic entity, but in general the courts do not accept this.
The simple fact that a parent company (or through its directors) is acting as director of its subsidiary, and as a director and/or sole shareholder determines the policy of its subsidiary with regard to its business activities and manages these activities, does not mean that these activities have thus become business activities of the parent company with the result that it may be held liable for all possible tortious acts (NJ 1996, 214).
Also, the mere fact that a corporate group has been restructured in order to ensure that the legal liability (if any) in respect of particular future activities of the group will fall on one member of the group rather than another is in principle not sufficient for piercing the corporate veil. This is different if the group structure is used to escape past or current obligations.
Karel Frielink
Attorney (Lawyer) / Partner
