OUTBOUND MERGER INTRODUCED IN SINT MAARTEN
Outbound mergers now possible
As per April 1, 2014 the amended Corporate Code (Book 2 Civil Code) of St. Maarten entered into force.
The possibility already existed that in connection with a merger, a foreign legal entity as the disappearing legal entity merges with a comparable legal form of the Corporate Code of St. Maarten on the condition that the law governing that foreign legal entity is not incompatible with the merger and the manner in which it is brought about (Article 2:323a BW; ‘inbound ’).
It has now also become possible that a legal entity within the sense of the Corporate Code as the disappearing legal entity merges with an acquiring legal entity under foreign law (Article 2:323b; ‘outbound ’). A condition in this case is also that the law governing that foreign legal entity is not incompatible with the merger and the manner in which it is brought about.
With regard to the acquiring (foreign) legal entity the rules applicable to such a merger of the foreign law applicable to that legal entity are taken into account as much as possible. Articles 2:310 up to and including 2:334 of the St. Maarten Corporate Code are applicable but exclusively with regard to the disappearing legal entity. This means for instance that the objection provisions of Article 2:316 Corporate Code are applicable.
The Dutch arrangement whereby a minority shareholder casting his vote against the merger can request the Court to award him compensation is not included in the Corporate Code. For that matter it is imaginable that a shareholder who suffers a loss as a consequence of the merger, can under certain circumstances claim compensation for it. However, a claim in that sense must be judged under the ordinary rules of the law of property as they are coloured by the law on legal persons.
Karel Frielink
Attorney (Lawyer) / Partner
(18 May 2014)
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