TAKE-OVER FORMALITIES UNDER THE LAWS OF THE NETHERLANDS ANTILLES
Shares or assets?
If one wants to take over the control of a Netherlands Antilles based company there are two options: acquiring either (a majority of) the shares or acquiring the assets of the company.
Share transfer
There are no legal restrictions as to the transfer of shares of a company. According to corporate law, the articles of association of a company may provide for certain restrictions.
Regarding bearer shares, no transfer deed is required as far as Netherlands Antilles law is concerned. Bearer shares are transferred by surrendering share certificates. The transfer of ownership is thus accomplished simply by the transfer of the certificate.
Regarding registered shares, a share transfer deed has to be entered into between the transferor and transferee. In addition, for a duly transfer of the shares either this deed should be served on the company or the transfer of shares should be acknowledged by the company. The latter can easily be done by the company by co-signing the transfer deed for acknowledgement. The directors of the company have the statutory obligation to update the shareholders register.
Asset purchase
According to Netherlands Antilles law, it is possible to take over an enterprise by transferring all its assets. In principle, parties can agree upon transferring assets without transferring the corresponding liabilities. It is a matter of freedom of contract.
Although the transfer of liabilities can be excluded, rights in rem in relation to property such as pledge and mortgage, and qualitative obligations (‘kwalitatieve verplichtingen’) with respect to real property which are registered in the public registries pass on with the property and are thus binding towards third parties. In rem rights are absolutely and exclusive, in the sense that the holder of such rights may in principle exercise his powers vis-à-vis all other persons regardless who is in possession of the property. Attachments are also transferred.
The conclusion of an agreement is not sufficient to achieve a transfer of ownership. Depending on the kind of asset to be transferred, Netherlands Antilles law describes different methods of delivery. There are different methods of delivery for (i) real property, (ii) moveable corporeal objects, and securities to bearer and to order, and (iii) intangible rights (receivables, debts, securities, contracts, intellectual property rights).
Agreements that require mutual performance (such as employment contracts) can usually only be transferred with the concurrence of the other contracting party.
Finally, it is possible that agreements between the vendor and a third party contain specific assignment clauses or clauses governing a change of control.
Creditor protection in case of an asset purchase
As stated above liabilities can be excluded from the transaction. Only in case a transaction can be held intentionally disadvantageous to the creditors of the transferor, those creditors, or a receiver in a bankruptcy, could have a claim on the transferee on the basis of fraudulent transfer (‘actio Pauliana’) or in certain circumstances when related parties or interwoven relations are concerned, equation (‘vereenzelviging’).
Karel Frielink
Attorney (lawyer) / Partner
