FOREIGN LEGAL CONCEPTS AND THE LAWS OF THE NETHERLANDS ANTILLES
Assimilation
Different legal systems result in different legal concepts. For example, English law has no concept of ‘economic beneficiary’ (‘economisch eigenaar’) as such. Instead, English law has concepts such as ‘equitable interest’ or ‘beneficial interest’ in an asset. The most obvious illustration of ‘equitable interest’ or ‘beneficial interest’ under English law is the right of a beneficiary of a trust.
But how should, e.g., the Netherlands Antilles deal with such foreign rights? If possible, they should be assimilated into Netherlands Antilles law. Assimilation is a variant of the ‘modification’ doctrine, namely interpretation of the legal system that has been designated …
Read the rest »
THE AMSTERDAM BASED ENTERPRISE COURT
Not available in the Netherlands Antilles
The ABN AMRO Bank case has been discussed in here. The case was brought before the Amsterdam Enterprise Court (‘Ondernemingskamer Hof Amsterdam’). No such court exists in the Netherlands Antilles. The Netherlands Antilles corporate code provides for an investigation in respect of foundations only.
Shareholders of a Dutch corporation (as well as the trade unions) may file a petition with the Enterprise Chamber of the Amsterdam Court of Appeal if they consider certain acts of the corporation mismanagement. The Enterprise Chamber deals with many good corporate governance issues and plays an important role in …
Read the rest »
FOREIGN SECURITY RIGHTS AND THE WAY THEY ARE TREATED IN THE NETHERLANDS ANTILLES
Enforcement is possible
According to Netherlands Antilles law, the question whether or not a security right can be created in a certain receivable must be determined according to the law governing that receivable. Netherlands Antilles international private law determines that the law that governs the receivable is the law that governs the underlying contract of the receivable. if the minimum requirements of a particular Netherlands Antilles security right have been met, a foreign law governed security right can be valid and enforceable, as if it were a Netherlands Antilles security right.
According to Netherlands Antilles law, a right of pledge …
Read the rest »
THE ANNULMENT OF CORPORATE DECISIONS BY MINORITY SHAREHOLDERS UNDER THE LAWS OF THE NETHERLANDS ANTILLES
They can file a petition
Minority shareholders who disagree with particular decisions have several options. The most important option is the annulment of a decision (section 2:21 Netherlands Antilles Civil Code; ‘NACC’). A resolution of a corporate body may be declared null and void when there is no quorum, majority, proposal, nomination and proposal for appointment or authorization required by Book 2 or the Articles (section 2:21.1 NACC). A resolution shall further be null and void if and for so long as there is no approval of another constituent body required by the corporate code or the Articles.
Every minority shareholder …
Read the rest »
CAN THE IDENTITY OF A SHAREHOLDER BE RETRIEVED UNDER THE LAWS OF THE NETHERLANDS ANTILLES?
Not easily
In the Netherlands Antilles, there does not exist a public register of shareholders in Netherlands Antilles companies. The company involved would be the source for a third party to obtain information as regards the identity of the shareholders of such company.
If all shares are bearer shares, which category of shares is transferable without any notification to the management of the company, it is possible that the management of the company is unaware of the identity of its shareholders.
Karel Frielink Curacao-based Attorney (lawyer) / Partner
WHAT IS A DUE DILIGENCE INVESTIGATION?
Reviewing legal, tax and other information
Due diligence in relation to mergers and acquisitions is an investigation of the business which is the subject of the transaction. Good faith requirements may trigger a duty to disclose certain information to the other party as well as a duty to investigate.
The purpose of a due diligence investigation is, a.o., to decide whether to proceed with the transaction as well as establishing areas of risk. More in general, the investigation aims at assessing the benefits and downside (liabilities) of a proposed acquisition, and comprises the past, the present and the predictable future of the …
Read the rest »
THE ABN AMRO BANK CASE REVISITED
Good faith requirements rule
On 3 May 2007, the Amsterdam Enterprise Court (‘Ondernemingskamer Hof Amsterdam’) ruled that ABN AMRO Bank must freeze its $21 billion sale of U.S. unit LaSalle to Bank of America, because in the Court’s opinion the deal requires prior shareholders’ consent. The Court ruled it was “unacceptable” for ABN AMRO Bank to sell the Chicago-based LaSalle unit without shareholder approval, not as such, but because this transaction is connected with Barclays’ plan for a friendly public offer as well as the counter-offer by three other banks with respect to the shares of ABN AMRO Bank itself.
FOREIGN COMPANIES AND TAX LIABILITY UNDER THE LAWS OF THE NETHERLANDS ANTILLES
A permanent establishment qualifies for tax liability
There will be a tax liability when the activities of a foreign company on the Netherlands Antilles can be qualified as a permanent establishment, as on the Netherlands Antilles profit tax (and private income tax) is levied from companies (and one-man enterprises), who carry on a business through a permanent establishment within the Netherlands Antilles. In this regard based on the National Ordinance on profit tax 1940 the definition for permanent establishment is as follows:
A. a fixed place of business through which the business of an enterprise is wholly or partly carried …
Read the rest »
ELECTRONIC AGREEMENTS UNDER THE LAWS OF THE NETHERLANDS ANTILLES
Commercial communication must always be recognizable as such
The Netherlands Antilles National Ordinance on Electronic Agreements is applicable on commercial communication. Commercial communication is all forms of offering and recommending goods and services, businesses and persons, among which advertising and direct marketing by electronic means from, or aimed at the Netherlands Antilles, directly or indirectly aimed at bringing about agreements. Electronic means concerns electronic, radio-electric, electromagnetic or optic possibilities for the transmission or storage of data. This includes for instance the fax, e-mail and the Internet.
All commercial communication must always be recognizable as such. The natural person or legal entity …
Read the rest »
LIMITED PARTNERSHIPS UNDER THE DUTCH CARIBBEAN LAWS
A silent partner must stay silent
Limited partnerships are often used, a.o. for (investment) fund activities. Limited partnerships are not legal entities but contractual arrangements between the general partner (often a limited liability company) and one or more limited (or silent) partners.
The principle of freedom of contract as it applies in the Netherlands Antilles and Aruba to contractual parties also applies to limited partnerships and its general and limited partners, absent certain mandatory provisions of law regarding limited partnerships, e.g. the general liability of all debts of the limited partnership by the general partner, and the prohibition that the …
Read the rest »
THE SELLING OF NOTES IN THE NETHERLANDS ANTILLES
It is prohibited to sell notes
In the Netherlands Antilles it is prohibited to sell notes to others than licensed credit institutions (Article 45 of the National Ordinance on the supervision of banking and credit institutions 1994). There is a possibility to obtain an exemption.
An exemption can be requested with the Central Bank to issue notes. The Central Bank shall provide such exemption if:
Read the rest »
SOLICITATION OF FUNDS IN ARUBA
There are restrictions
The Aruban State Ordinance on the Supervision of the Credit System (‘Landsverordening toezicht kredietwezen‘, the ‘SOSCS’) prohibits anyone from engaging in the business of a credit institution (‘kredietinstelling’) in Aruba without a license issued by the Central Bank of Aruba.
In Article 48, the SOSCS also prohibits any natural person or legal entity from approaching the public (i.e. any other person than a credit institution) in order to attract funds in the course of his or its occupation or business, which funds in total or for each case of separate attraction, respectively, are below an amount to …
Read the rest »