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 …
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18
Oct 2010
CATEGORY

Corporate

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THE DISMANTLING OF THE NETHERLANDS ANTILLES

The Country known as the Netherlands Antilles will disappear as of 10-10-10

The country, the Netherlands Antilles, consists of Bonaire, Curacao, St. Maarten, St. Eustatius and Saba, and forms part of the Kingdom of the Netherlands. On 10 October 2010 the Netherlands Antilles will no longer exist. Two new countries will be born on that date: the country Curacao and the country St. Maarten. Both new countries will be part of the Kingdom of the Netherlands; however, they will each have their own government and legislature. The island of Aruba gained similar autonomy in 1986.

The legislation currently in place …
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30
Sep 2010
CATEGORY

Legal

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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 …
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31
Aug 2010
CATEGORY

Corporate

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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 …
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04
Aug 2010
CATEGORY

Corporate

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PREJUDICED INTERESTS OF MINORITY SHAREHOLDERS IN THE NETHERLANDS ANTILLES

They may force the company to take-over their shares

Article 2:251(1) of the Netherlands Antilles Civil Code reads as follows: “A shareholder of registered shares, whose rights or interests are prejudiced to such an extent, by the conduct of the company or one or more co-shareholders, that a continuation of his shareholding cannot reasonably be required of him, may institute a claim against the company for withdrawal, demanding that his shares be acquired against payment in cash”.

This provision may only be successfully triggered in exceptional circumstances. This could be the case if the company or co-shareholders have a structural policy …
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13
Mar 2010
CATEGORY

Corporate

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PIERCING THE CORPORATE VEIL IN ARUBA

Ignoring the legal personality of a company

A shareholder is not personally liable for acts performed in the name of the company and is not liable to contribute to losses of the company in excess of the amount which he must pay to the company as contribution for his shares. There is therefore a legal separation between the assets and liabilities of the company and those of the shareholder.

Piercing the corporate veil in its purest form means making a shareholder responsible for the actions of the company. In essence this means ignoring the separate legal identity of the company. …
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27
Feb 2010
CATEGORY

Corporate

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THREE QUESTIONS ON ARUBAN BANKRUPTCY LAWS

FAQ

Question 1

In which cases and by whom may bankruptcy proceedings be initiated in accordance with Aruban bankruptcy law?

Filing for bankruptcy may be done either by the debtor itself or by one or more of its creditors. If the debtor is a company, generally speaking the managing directors do not have the authority to petition for bankruptcy of the company without authorization thereto from the general meeting.

The pre-requisites for making a bankruptcy order on application, regardless of whether the application is made by the debtor or by any of the other above mentioned persons, is, that the …
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13
Feb 2010
CATEGORY

Legal

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DRAG-ALONG RIGHTS UNDER THE LAWS OF ARUBA

Drag-along rights may be validly created

On January 1, 2009 the new Aruba Ordinance on companies with limited liability (vennootschap met beperkte aansprakelijkheid; VBA) became effective.

A drag-along right is a right that enables a majority shareholder to force a minority shareholder to join in the sale of his shares in a company (VBA). Generally, the majority shareholder doing the dragging must give the minority shareholder the same price, terms, and conditions that apply to him. The question with regards to Aruban law is whether the articles of association of a VBA may contain drag-along provisions.

Article 25(1) of the …
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16
Jan 2010
CATEGORY

Corporate

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SEPARATION BETWEEN LEGAL AND BENEFICIAL OWNERSHIP OF SHARES IN THE DUTCH CARIBBEAN

The beneficial owner of shares is not a shareholder

On March 1, 2004 the act on corporate law (Book 2 Netherlands Antilles Civil Code) became effective. The Act governs NVs (‘public limited liability company’) and BVs (‘private limited liability company’). The main object of the legislator was to provide flexibility and maximum freedom for organization and presentation. Accordingly, the Act contains few mandatory provisions, such as provisions relating to the interests of creditors and minority shareholders.

Concepts like registered, subscribed and contributed capital do not appear in the Act. As a result  no minimum capital is required unless such a requirement …
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09
Jan 2010
CATEGORY

Corporate

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THE SELLING OF SHARES BY A DUTCH CARIBBEAN COMPANY

Answers to foreign counsel queries

A Netherlands Antilles company (NV or BV) may have assets, both local and foreign. Not seldom such a company wants to sell all or a portion of its assets. If foreign assets or a foreign buyer is involved, foreign counsel always asks questions about the laws of the Netherlands Antilles. Several of those questions will be dealt with here. Let’s assume that a Netherlands Antilles company wants to sell its shares in a Dutch BV.

The Netherlands Antilles NV or BV may sell some or all of its shares in the Dutch BV. It is customary …
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02
Jan 2010
CATEGORY

Corporate

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A COMPARISON OF THE DUTCH BV AND THE DUTCH ANTILLEAN BV

There are similarities and differences

There are certain similarities between the Dutch and the Antillean BV, in fact they are fundamentally the same type of entity. The main object of the Antillean legislator was, however, flexibility and maximum freedom of organization and presentation. Accordingly, the Antillean Act contains few mandatory provisions, such as provisions relating to the interests of creditors and minority shareholders.

An Antillean BV may be established in a form that resembles what a foreign shareholder encounters in his own legal system: the BV can, for example, be organized like a Dutch BV or NV, a Delaware corporation, …
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19
Dec 2009
CATEGORY

Corporate

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THE INCORPORATION OF A NETHERLANDS CARIBBEAN LIMITED LIABILITY COMPANY

Incorporating an NV or BV is not a hassle

The act on corporate law (Book 2 Netherlands Antilles Civil Code) governs the NV (‘public limited liability company’) and BV (‘private limited liability company’). These companies can be used for group finance or holding activities, (international) joint-ventures, funds, structured finance and “plain-vanilla” (local) activities.

A notarial deed is required for the formation of an NV or BV and for any amendment to articles of association (a.k.a. articles of incorporation). Formation can however, be very quick (within one or two days if necessary) and doesn’t require many other formalities. The founders of …
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12
Dec 2009
CATEGORY

Corporate

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