ARUBA TO INTRODUCE A NEW LIMITED LIABILITY CORPORATION IN 2007
U.S. Limited Liability Company used as model
It is expected that Aruba will introduce a new corporate vehicle on 1 January 2007: the Corporation with Limited Liability (‘vennootschap met beperkte aansprakelijkheid’ or ‘VBA’).
The VBA can be established in a form that resembles what a foreign shareholder encounters in his own legal system: the VBA can, for example, be organized like an Aruban NV, a Delaware corporation, a BVI company or a German GmbH. The motto is: “You request, we provide”. The chameleonic possibilities of the VBA contribute to its attractiveness.
The main object of the legislator is flexibility and …
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BY WHOM MAY SUPERVISORY DIRECTORS BE REPRESENTED UNDER THE LAWS OF ARUBA?
Only a supervisory director may represent the same
Aruban law does not entail any provision regarding the representation of supervisory directors of a limited liability company (‘NV’). Also, the representation of managing directors is not specifically laid down in Aruban law.
As the management board and the supervisory board are to a certain extend comparable, and as legal literature sheds insufficient light on the representation of supervisory directors, it is my view that one should look at what influential leading authorities on corporate law say on the representation of managing directors.
My conclusion is that these authorities share the view …
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SHAREHOLDERS’ MEETINGS AND VIDEO CONFERENCING UNDER THE LAWS OF ARUBA
Can a shareholders’ meeting be held outside Aruba?
According to article 88 of the Code of Commerce of Aruba, shareholders’ meetings must be held in Aruba. Although it could be argued that this rule is pointless as Aruban law allows shareholders to adopt resolutions in writing, and they therefore would not even actually have to meet, it has not yet been challenged in court. Nevertheless, shareholders’ meetings of some limited liability company’s (‘NV’) are held abroad for many years already.
However, it could be that a court will quite strictly interpret the rule regarding the place where the shareholders’ meeting …
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SHAREHOLDERS’ LIABILITY AND RESPONSIBILITIES UNDER THE LAWS OF ARUBA
A shareholder must behave reasonably
Shareholders’ liability is of a different nature than directors’ liability. Unlike managing directors and supervisory directors, shareholders of a limited liability company (‘NV’) do not have a contractual or functional relationship with the company and, except for the obligation to pay up their shares, they do not have any duties towards the company. As long as they act in accordance with the principle of good faith, they need not necessarily act in the best interests of the company.
Article 130 Commercial Code of Aruba provides that all persons, supervisory directors and shareholders included, not being …
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THE NATURE OF A BANKRUPTCY ORDER IN THE NETHERLANDS ANTILLES AND ARUBA
A general attachment on all assets
The nature of a bankruptcy order is to impose a general judicial attachment on all assets of the debtor for the benefit of all of its creditors. The bankruptcy has as an effect that all individual attachments and foreclosures terminate.
It should be noted that a creditor secured by a mortgage, that stipulates that the creditor may execute, as well as a creditor that is secured by pledge, may exercise their rights as if there were no bankruptcy. Pursuant to case law also creditors that have assets transferred to them in fiduciary ownership may …
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OLD AND NEW CORPORATE TAX REGIMES IN THE NETHERLANDS ANTILLES
The new regime is attractive too
If a Netherlands Antilles based company (NV or BV) is used for foreign business activities one has to realize that such company is in principle subject to the Netherlands Antilles profit tax for income generated wherever in the world because the company has been incorporated under Netherlands Antilles law.
The old “offshore regime“, that has been abolished in 2001, granted a low profit tax rate of 2.4 – 3% to companies with foreign investment activities such as financing, investing in portfolio activities or holding shares in foreign companies. If the Netherlands Antilles company will …
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CREDIT LINKED REPACKAGING IN THE NETHERLANDS ANTILLES
A bankruptcy-remote vehicle can be used in the Netherlands Antilles
A credit linked note (‘CLN‘) enables an Investor to purchase and fund an asset with a return linked to the credit risk of the asset itself and an additional credit risk transferred by way of a credit derivative between the issuer (a Special Purpose Vehicle or ‘SPV’) and the bank (the Protection Buyer). A credit linked note structure enables the risks transferred using a credit swap (or Loan Default Swap) to be embedded into a security and issued to an Investor. The Investor receives a coupon and par redemption unless …
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STRUCTURING A CURACAO BASED FUND
Flexibility is the key-word
From a legal point of view, establishing a fund in Curaçao (the Netherlands Antilles) has become very attractive since under new corporate law a limited liability company can be established very quickly and very flexible. Virtually everything is possible with this new legal entity. There is no minimum issued share capital requirement. Incorporation can be done within a day and without the need for any prior governmental approvals. It is possible to split voting rights and dividend rights. There is no statutory requirement to have shares with a par value. The set up and maintenance costs …
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SERVICE IN THE NETHERLANDS ANTILLES OF FOREIGN JUDICIAL AND EXTRAJUDICIAL DOCUMENTS
Service by mail is not allowed
The Kingdom of the Netherlands is a signatory — for the Kingdom in Europe and Aruba, but not the Netherlands Antilles — of the Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters, Nov. 15, 1965 (the ‘Convention’). Because the Kingdom of the Netherlands has not extended the Convention to the Netherlands Antilles, there is no internationally agreed means of service between the United States of America and the Netherlands Antilles. As a consequence, the Netherlands Antilles has not accepted Article 10 of the Convention and has not …
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OVERVIEW ANTI-MONEY LAUNDERING REGULATIONS IN THE NETHERLANDS ANTILLES
The Netherlands Antilles maintains its reputation of pursuing high standards and integrity
The Netherlands Antilles Government on a continuing basis is striving to introduce legislation and regulatory regimes in order to enhance its ability to attract quality business, and enable the country to maintain its reputation of pursuing high standards and integrity. Up-to-date legislation combating any form of money laundering, for example, has been enacted over the past years. Here follows an overview of important regulations regarding anti-money-laundering in the Netherlands Antilles.
Articles 1 to 4 of the National Ordinance Penalization Money Laundering (‘Landsverordening Strafbaarstelling Witwassen van Geld’) which criminalize …
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LEGAL ASSISTANCE IN CRIMINAL INVESTIGATIONS, EXTRADICTION AND ENFORCEMENT OF CRIMINAL JUDGMENTS BETWEEN THE UNITED STATES OF AMERICA AND THE NETHERLANDS ANTILLES
A treaty is required
International legal assistance
There exists a treaty between the Kingdom of the Netherlands (of which the Netherlands Antilles form a part) and the United States of America regarding the mutual legal assistance regarding criminal matters. “Legal assistance” includes assisting with, or granting co-operation to an investigation, sending and/or obtaining documents, files, or information, hearing of witnesses, serving notice of documents or notifying third parties, attachments and search of premises.
According to the treaty, the competent authorities with regard to the requests for legal assistance are the Attorney General or his authorized representative for the United States …
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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 …
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