TRANSFER PROVISIONS REGARDING SHARES UNDER THE LAWS OF ARUBA AND THE NETHERLANDS ANTILLES
Shot Gun, Piggy-Back, Carry-Along or Right of First Refusal
The right of first refusal means that a shareholder may sell all of his shares to a third party, provided he has first offered those shares to the other shareholders (on the same terms and conditions).
Carry-along (or drag-along) means that a minority shareholder is forced to sell his shares if the majority shareholder accepts an offer from a third party to buy all outstanding shares. This may be critical if the third party is only willing to buy if he can acquire all of the shares of the company.
The …
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QUALIFICATIONS REGARDING DIRECTORS OF A NETHERLANDS ANTILLES COMPANY
Offshore companies must have one local director or representative
In order to obtain and maintain the requisite exemption from foreign exchange control regulations, at least one managing director or one local representative of a Netherlands Antilles NV or BV must be resident in the Netherlands Antilles. Trust service providers in the Netherlands Antilles can provide such services.
Other than that said requirement there are no qualifications in order to be able to be appointed as managing director. Managing directors do not need to be a shareholder of the NV or BV.
Karel Frielink Attorney (Lawyer) / Partner
LIABILITY OF THE EMPLOYER FOR ACTS OF AN EMPLOYEE UNDER THE LAWS OF ARUBA AND THE NETHERLANDS ANTILLES
The formal employer is not always liable
According to the Supreme Court an employer bears liability for damage caused by an employee to thirds parties, if “the chance of committing the failure has been increased by the assignment to perform [his] tasks and in case… the person by whom he was employed, had a direct control over the acts through which the fault was caused”. The employer can be held liable for tort committed by an employee (article 6:170 of the Aruban and the Netherlands Antilles Civil Code).
Sometimes employees have an employment agreement with one company (the ‘formal’ employer) …
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ARBITRATION AND CORPORATE DISPUTES UNDER NETHERLANDS ANTILLES LAW
The articles of association may contain an arbitration clause
The articles of Royal Dutch Shell plc (an English company headquartered in The Hague) provide for a peculiar dispute resolution: disputes between shareholders and the company (or its subsidiaries) but also disputes between shareholders and professional service providers of the company, like accountants, shall be exclusively and finally resolved under the Rules of Arbitration of the International Chamber of Commerce (ICC). Whether this clause will be upheld in any and all jurisdictions is questionable.
It is believed that the clause was inserted in an attempt to avoid US class actions (recently …
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DEFAMATION UNDER THE LAWS OF ARUBA AND THE NETHERLANDS ANTILLES
The nature of the medium is of relevance
Under Aruban and Netherlands Antilles law the doctrine of defamation pertaining to civil law is governed by the general rules of liability arising from an unlawful act, more specific to harm ones good name. Whether a statement under Aruban or Netherlands Antilles law shall be considered as an unlawful infringement to ones reputation depends on the circumstances of the case. If the person making the statement is aware of the fact that the statement is not true, he is in principle liable. Furthermore, according to case law, the following circumstances appear to …
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GENERAL EXEMPTIONS FOR FOREIGN INVESTMENT INSTITUTIONS UNDER NETHERLANDS ANTILLES LAW
Several general exemptions are available
The National Ordinance on the Supervision of Investment Institutions and Administrators 2002 provides for a general exemption for investment institutions for which participating interests are solicited or obtained from “professional parties” only.
Another general exemption is the so-called high denomination dispensation. This exemption, which is strictly spoken individual dispensation, is available only if the minimum initial subscription amount is at least US$ 50,000 (or its equivalent in another currency). It should be noted that the high denomination dispensation needs to be applied for with the Central Bank.
If a general exemption applies, no further stipulations …
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PARTIAL EXEMPTIONS FOR FOREIGN INVESTMENT INSTITUTIONS UNDER NETHERLANDS ANTILLES LAW
Partial exemptions can be requested from the Central Bank
In accordance with the National Ordinance on the Supervision of Investment Institutions and Administrators 2002 an investment institution shall be granted a license if it and its depositary, if employed by the investment institution, comply with the requirements stipulated in the Central Bank’s (Bank van de Nederlandse Antillen) directives. However, partial exemptions can be requested from the Central Bank for an investment institution that is a foreign investment institution subject to adequate home-country supervision.
In order to receive certain (partial) dispensation from license requirements, the Central Bank requires foreign investment institutions …
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INVESTMENT INSTITUTIONS AND ADMINISTRATORS UNDER NETHERLANDS ANTILLES LAW
It is a punishable offense to raise money without a license
The National Ordinance on the Supervision of Investment Institutions and Administrators 2002 (‘Landsverordening toezicht beleggingsinstellingen en administrateurs’) provides for a licensing system for investment institutions and administrators. The general prohibition is:
“It is a punishable offence to raise or obtain pecuniary means or other property for purposes of participating in an investment institution which has not been licensed by the Central Bank or to offer participating interests in such an investment institution in or from the Netherlands Antilles.”
For the purposes of granting a license, the Ordinance distinguishes between:
CRIMINAL LIABILITY OF MANAGING DIRECTORS UNDER NETHERLANDS ANTILLES LAW
You better behave!
There are numerous articles in the Penal Code of the Netherlands Antilles and various statutes that impose specific criminal sanctions on managing directors and supervisory directors. Punishable offenses include the following:
– international publication of untrue financial statements;
– involvement of a managing or supervisory director of the company in situations that are illegal or in conflict with the articles of incorporation, resulting in serious harm to the company;
– prior to or during bankruptcy proceedings, disguising profits or losses, or fraudulently disposing of assets; and
– prior to or during bankruptcy proceedings, giving preferential treatment to …
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CO-DEBTORS AND THE LAWS OF ARUBA AND THE NETHERLANDS ANTILLES
Is a deed of joint and several liability compatible with the company’s purpose?
A deed of joint and several liability generally achieves the goal of creating a second, jointly and severally liable debtor. Banks for example may require such a deed as part of their financing arrangement.
Although a joint and several liability is not technically the same as a suretyship (“borgstelling”), courts might apply the statutory provisions applicable to suretyship to a deed of joint and several liability if such deed in fact serves the same purpose as a suretyship. Therefore, it is recommendable to specifically state that the …
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LIABILITY FOR OIL POLLUTION IN THE NETHERLANDS ANTILLES
Limitation of liability can be invoked up to a certain amount
In the Netherlands Antilles the liability for oil pollution is dealt with in the National Ordinance liability oil tankships 1998 (“Landsverordening Aansprakelijkheid Olietankschepen”). This Ordinance implements two treaties:
– The Treaty of 27 November 1992, entered into in London, the United Kingdom, relating to the statutory liability for damages by oil pollution, and
– The Treaty of 19 November 1976 entered into in London, the United Kingdom, relating to the limitation of liability for maritime claims.
The Ordinance provides that the owner of the ship which carries oil “in …
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INTERNATIONAL LEGAL ASSISTANCE AND THE NETHERLANDS ANTILLES
Mutual assistance regarding criminal matters
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 this treaty, the competent authorities with regard to the requests for legal assistance are the Attorney General or his authorized representative for the United States and the …
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