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PRE-EMPTION RIGHTS IN THE DUTCH CARIBBEAN

Prevent a shareholder from dilution

According to article 2:106 of the Netherlands Antilles Civil Code shareholders have a pre-emption right on the issue of new shares, being the right to be offered any new issue in each class, pro rata to the number of shares of such class held by them. The pre-emption right is intended to protect the interests of shareholders and to prevent their stake from being diluted.

According to the Civil Code there are three ways to limit the pre-emption rights of the shareholders:

1. A limitation may provided for in the articles of the company (art. 2:106(1) Civil Code).
2. The articles may provide that a corporate body designated in the articles shall decide on all or specific issues as to whether or not a pre-emption rights exist and as to the various terms thereof (art. 2:106(1) Civil Code).
3. The shareholders may regulate their mutual relationships and their relationship to the company, including the manner in which they exercise their rights as shareholders in a shareholders agreement (art. 2:127(2) Civil Code)

Karel Frielink
Attorney (Lawyer) / Partner