LEGAL MERGERS IN CURACAO
The Curacao Civil Code provides for a simplified merger procedure
The acquisition of a business enterprise may take place through the purchase of shares (take-over), the purchase of assets and liabilities or a legal / statutory merger. The Curacao Legal Code on corporate and other legal persons contains detailed provisions for mergers of companies limited by shares (NV) and private limited companies (BV).
Basically, a legal merger entails the absorption of one legal entity by another in exchange for shares, or even without such exchange. The absorbed entity ceases to exist. A legal merger requires a notarial deed. Legal mergers …
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UNITED NATIONS BASIC PRINCIPLES ON THE ROLE OF LAWYERS
The Basic Principles are considered to be a “soft-law” instrument
The Basic Priciples on the role of lawyers were adopted by the Eighth United Nations Congress on the Prevention of Crime and the Treatment of Offenders, Havana, Cuba, 27 August to 7 September 1990.
According to the preambule professional associations of lawyers have a vital role to play in upholding professional standards and ethics, protecting their members from persecution and improper restrictions and infringements, providing legal services to all in need of them, and cooperating with governmental and other institutions in furthering the ends of justice and public interest, The …
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THE CURACAO MEMBER-MANAGED COMPANY
The right form for small businesses
Until March 1, 2004 only manager managed companies were known. According to the current Curacao Civil Code, the articles of a company may provide that such company be a member managed company, which is a company without a board of directors. The shareholders (members) are then in charge of the company, including its day-to-day affairs. A member managed company is suitable for smaller companies, e.g. family businesses, with only one or a few shareholders.
If such designation is absent in the articles of a company, the company will be a manager managed company. The designation …
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THE CURACAO PRIVATE FOUNDATION
A Private Foundation can be used for tax planning and asset protection The Curacao Private Foundation was introduced by the National Ordinance Regarding Foundations as published on October 31, 1998. Since March 1st, 2004, these rules are laid down in Book 2 of the Curacao Civil Code. The Private Foundation possesses corporate personality but does not have share capital. The Private Foundation is incorporated by deed executed before a Curacao public notary and is registered in the Register of Foundations at the Curacao Chamber of Commerce. The object of the Private Foundation may include a number of activities, and is …
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THE ENFORCEMENT OF A JUDGEMENT BY THE COURTS IN CURACAO
Judgments are immediately enforceable most of the time
According to Article 55, par. 1 of the Curacao Code of Civil Procedure, opposition (in the case of a default judgment) or appeal (in the event of adversarial proceedings) prevent the enforcement (execution) of a judgment unless the decision is ‘enforceable notwithstanding opposition or appeal’ a.k.a. a judgment which is declared ‘immediately enforceable’ (‘uitvoerbaar bij voorraad is verklaard’).
The submission of an appeal results, therefore, in a stay of execution, unless the first-instance court, on a motion by one of the parties, has declared its judgment enforceable even if it is challenged …
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THE DUTCH CARIBBEAN JUDICIAL SYSTEM
A well developed system
The judicial system of the various islands in the Dutch Caribbean (Aruba, Bonaire, Curacao, St. Maarten, Saba and St. Eustatius) is independent, has a long history, and is well developed. It is capable of resolving complex commercial disputes in a just and efficient manner. The judges in the Dutch Caribbean are well-trained, professional judges.
In general, parties in civil proceedings have the right to appeal to the Joint Court of Appeal of Aruba, Curacao and St. Maarten and of Bonaire, Sint Eustatius en Saba (‘Gemeenschappelijk Hof van Justitie van Aruba, Curacao en St. Maarten en van …
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CREDIT INSTITUTIONS IN CURACAO AND ST. MAARTEN
A license is required
The National Ordinance on the supervision of banking and credit institutions 1994 (Landsverordening toezicht bank- en kredietwezen, the “NOSB”) of both Curacao and St. Maarten prohibits any one (other than a licensed Credit Institution) from – directly or indirectly – soliciting funds from the public or extending credit to the public (art. 45 NOSB).
It should be noted that the Explanatory Memorandum to the NOSB bestows a wide scope on the term “public”, i.e. anyone other than a licensed Credit Institution. The Central Bank of Curacao and St. Maarten may grant individual exemptions from this prohibition. …
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INVESTMENT INSTITUTIONS IN CURACAO AND ST. MAARTEN
Raising money without a license is prohibited
The National Ordinance on the Supervision of Investment Institutions and Administrators 2002 (Landsverordening toezicht beleggingsinstellingen en administrateurs, a.k.a. “NOSIIA”) of both Curacao and St. Maarten prohibits raising, or obtaining, pecuniary means or other property for the purpose of participating in an investment institution that has not been granted a license by the Central Bank of Curacao and St. Maarten, and prohibits offering participating interests in such an investment institution in or from Curacao or St. Maarten respectively.
Investment institutions may be exempted from this prohibition if the moneys or goods to be exchanged for …
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THE RHYTHM AND BLUES OF CURACAO CONTRACT LAW
Principle of fairness and reasonableness
When considered in the perspective of the laws of Curacao, the reliance on or the enforcement of contractual terms and conditions contained in any agreement, may under certain circumstances be contrary to the overriding principle of ‘fairness and reasonableness’ (redelijkheid en billijkheid) which governs the relationship between the parties to an agreement. Prof. Tjittes calls this good faith principle the Rhythm & Blues of our legal system.
Civil law systems such as the Dutch, French, German, or our system, explicitly espouse and apply this principle, whereas common law systems (e.g. English common law) do not …
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U.S. JUDGMENTS AND CURACAO
The recognition and enforceability of foreign judgments in the absence of a treaty
In the absence of an applicable treaty between foreign countries (for example the U.S.) and Curacao, a judgment rendered by a U.S. court will not be enforced by Curacaoan courts. In order to obtain a judgment which is enforceable in Curacao the claim must be re-litigated before the Curacao courts.
Nevertheless, a judgment rendered by a U.S. Court will, under current practice, be recognized by a Curacaoan court
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SECURITIZATION IN CURACAO
Curacaoan special purpose vehicles are commonly used in cross–border financing transactions
Curacaoan special purpose vehicles (SPVs) are commonly used in both cross–border financing transactions as well as in Curacao domestic financing transactions. As far as cross–border transactions are concerned, (synthetic and cash) securitizations, repackagings, collateralized debt obligations (CDOs), collateralized loan obligations (CLOs), leasing transactions, MTN and other note issuance programs are among the most popular transactions involving a Curacao SPV.
There are a number of reasons that make Curacao an attractive jurisdiction in which to set up SPVs in structured financing transactions. The first of these is the favorable Curacaoan …
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THE ANNUAL ACCOUNTS OF A LARGE CURACAO COMPANY
Stricter rules for large companies
Under Curacao law the annual accounts of limited liability companies which do not qualify as so called large companies, need to be prepared in accordance with generally accepted standards and shall provide sufficient insight as to enable a sound judgment to be formed regarding the assets and the results and, to the extent the nature of the annual accounts so permit, regarding the solvency and liquidity of the company (article 2:116 (4) Curacao Civil Code). This is comparable to the principles of good business practice (goed koopmansgebruik).
For large companies the legislator chose a tighter …
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