PROPOSED REVIEW DUTCH CARIBBEAN CORPORATE CODE
Various proposals not yes discussed here
The prohibition of appointing Supervisory Directors besides a ‘one-tier Board’ will be deleted (Article 2:19 paragraph 1 proposed bill). Supervisory Directors being a legal entity are allowed to a limited extent (Article 2:19 paragraph 3 proposed bill).
For the NV and the BV the law determines who has the right to attend meetings (Article 2:129/229 proposed bill). Unfortunately, in this connection no attention is given to the holders of depositary receipts for shares. In the case of concurred depositary receipts (i.e. certificates released with the co-operation of the corporation) I would prefer to grant the holders …
Read the rest »
PROPOSED REVIEW DUTCH CARIBBEAN LEGISLATION ON CONFLICTING INTEREST
The proposed bill gives shareholders more freedom
Earlier in 2010, a draft bill was proposed to amend the Corporate Code (Book 2 Civil Code) of Curacao, St. Maarten, Bonaire, St. Eustatius and Saba (which formerly constituted the Netherlands Antilles). Among other things, the provisions with regard to conflicting interest have been thoroughly reviewed and strongly curtailed.
The basic rule provides that the authority with regard to certain legal acts involving the legal entity and its Managing Director (e.g., agreements between the legal entity and its director) as well as lawsuits between a legal entity and its Managing Director rests with …
Read the rest »
PROPOSED REVIEW DUTCH CARIBBEAN LEGISLATION ON DIRECTORS’ LIABILITY IN BANKRUPTCY
Defects detected in the annual accounts drawn up may be relevant
Earlier in 2010, a draft bill was proposed to amend the Corporate Code (Book 2 Civil Code) of Curacao, St. Maarten, Bonaire, St. Eustatius and Saba (which formerly constituted the Netherlands Antilles). Hopefully, the Bill comes into force in 2011. Among other things, the provisions with regard to Managing Director’s liability have been improved.
In the event of the bankruptcy of the legal entity each Managing Director is jointly and severally liable to the estate for the deficit being the amount of the debts insofar as they cannot be …
Read the rest »
PROPOSED REVIEW DUTCH CARIBBEAN CROSS BORDER MERGER LEGISLATION
Proposed bill introduces outbound mergers
Earlier in 2010, a draft bill was proposed to amend the Corporate Code (Book 2 Civil Code) of Curacao, St. Maarten, Bonaire, St. Eustatius and Saba (which formerly constituted the Netherlands Antilles). Hopefully, the Bill comes into force in 2011.
The possibility already currently exists that in connection with a merger, a foreign legal entity as the disappearing legal entity merges with a comparable legal form of Book 2 BW 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 …
Read the rest »
PROPOSED REVIEW DUTCH CARIBBEAN LEGISLATION ON REPRESENTATION
Restrictions in managing authority work through into the representative authority
Earlier in 2010, a draft bill was proposed to amend the Corporate Code (Book 2 Civil Code) of Curacao, St. Maarten, Bonaire, St. Eustatius and Saba (which formerly constituted the Netherlands Antilles). Hopefully, the Bill comes into force in 2011. Some of the proposed changes will be discussed here.
Restrictions of the managing authority can arise from a by-law or a corporate agreement. Individual Managing Directors exercise their powers with due observance of the resolutions of the Management Board (Article 2:8 paragraph 2 Civil Code). Subject to restrictions arising from …
Read the rest »
INQUIRY PROCEDURE TO BE INTRODUCED IN THE DUTCH CARIBBEAN
The Joint Court will become the forum of choice for corporate disputes
Earlier in 2010, a draft bill was proposed to amend the Corporate Code (Book 2 Civil Code) of Curacao, St. Maarten, Bonaire, St. Eustatius and Saba (which formerly constituted the Netherlands Antilles). The proposed legislation introduces a so-called inquiry procedure for, amongst others, limited liability companies. The inquiry procedure (a.k.a. investigation proceedings) can result in a court ordered investigation into the affairs of a corporation.
Shareholders of such a corporation (i.e. an NV or BV) may file a petition with the Joint Court of Justice of Aruba, Curacao …
Read the rest »
THE MANAGEMENT BOARD OF A DUTCH CARIBBEAN LEGAL ENTITY
The management board is responsible for the day-to-day affairs
The management board has the function of managing the legal entity, i.e., making policy and conducting the day-to-day management of such legal entity (NV, BV, Foundation or Association). The management board is responsible for the management of the entity and is authorized to represent it, except where restricted by the articles of incorporation.
The management board is the legal entity’s centre of gravity. The management board of a Curacao or St. Maarten company (NV or BV) combines the functions of executive directors and senior officers in a U.S. corporation, unless the …
Read the rest »
THE DUTCH CARIBBEAN INCORPORATION DOCTRINE
The courts apply the law of the state where the legal entity was incorporated
The Netherlands Antilles adheres to the Incorporation Doctrine (Netherlands Antilles State Ordinance of 9 September 1960, which entered into force on the 10th of September 1960, P.B. 1960, 166). According to this doctrine, the internal affairs of a corporation are governed solely by the laws of the state in which it was formally incorporated. This doctrine was confirmed in the cases of Natco Trust v. mr Thesseling q.q., Hoge Raad (Dutch Supreme Court) 20 April 1990, NJ 1991, 560; TAR-Justicia 1 (1991), p. 24-35, and IBC …
Read the rest »
DIRECTORS’ LIABILITY IN THE DUTCH CARIBBEAN
Personal and several liability
The members of the Board of Directors are personally and severally liable towards the NV (or BV, as the case may be) for any loss caused by the improper performance of duties. Each member of the Board who proves that he cannot be blamed for such improper performance and that the activities concerned fall outside the scope of activities addressed to him, and that he has not been negligent in taking steps to avert the related consequences, is not liable (Article 2:14 Section 4 Netherlands Antilles Civil Code; NACC). Therefore, a division of tasks among such …
Read the rest »
THE NEW SURINAM NV
An introduction to draft legislation
The law of the Republic of Surinam is in full swing. The Surinam government on a continuing basis is striving to introduce legislation in order to enhance its ability to attract quality business. A recent example is a whole new Civil Code, to become effective in 2010 or 2011 at the latest. Part of this Civil Code is a new act on corporate law: Book 2 Surinam Civil Code (the “Act”).
The Surinam limited liability company (NV) as governed by the Act is a completely new, contemporary and revolutionary entity with unprecedented possibilities. The main …
Read the rest »
INADEQUATE CAPITALIZATION OF AN ARUBAN COMPANY
Liability for thin-capitalization?
In terms of ‘piercing the corporate veil’, thin or inadequate capitalization usually means capitalization that is not in proportion to the nature of the risks the business of the corporation necessarily entails; in other words it is based on likely economic needs rather than legal requirements.
Shareholders of a company in Aruba are under an obligation to pay to the company what is due with respect to the shares, i.e. the shareholder’s capital contribution, and such contribution may not be withdrawn without due process. This is the only financial obligation of a shareholder towards the company, unless …
Read the rest »
LECTURE ON GOOD CORPORATE GOVERNANCE IN CURACAO
Corporate Governance Adviser must be a strong and independent watchdog over the executive also
On April 13, 2010 a seminar on Good Corporate Governance with respect to Curacao-owned enterprises and foundations was held in Curacao, and organized by Certa Legal. I was one of the keynote speakers and delivered my presentation in the Dutch language (click here for the presentation or click here for the coverage of the event by the Antilliaans Dagblad).
I argued that government-owned companies should be left out of the political sphere as much as possible, so they can benefit …
Read the rest »