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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ORDINARY VERSUS SUMMARY PROCEEDINGS IN ARUBA
Interlocutory or summary proceedings provide for immediate relief
Article 110 of the Netherlands Antilles and Aruba Code of Civil Procedure (‘the Code’) provides that all adversarial proceedings shall be initiated by means of a petition to the court of first instance. Proceedings so initiated are ordinary proceedings a.k.a. proceedings on the merits.
A petitioner may opt for preliminary relief proceedings (a.k.a. interlocutory proceedings; ‘kort geding’). Article 226 of the Code provides that in urgent cases which require an immediate decision, the plaintiff may request a provisionally enforceable judgment (‘beslissing bij voorraad’).
Article 229 of the Code provides that a provisional …
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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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ARUBAN LAW REGARDING CORPORATE AUTHORITY
The Aruba Trade Register should be checked
The laws of Aruba provide that, subject to restrictions laid down by any statutory provision or a corporation’s articles of association, the board of directors of a company shall be competent to represent the company, i.e. a limited liability company (NV, AVV or VBA). In the event of the company having several managing directors, any managing director shall be competent, insofar as not otherwise provided by the articles of association (or sometimes bylaws). The articles of association may also grant other officers, to be designated by or pursuant to the articles, representative authority, …
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PLC CROSS BORDER LAW FIRM RECOMMENDATIONS 2010
Netherlands Antilles
According to PLC Cross Border (Which lawyer?), Spigthoff Attorneys & Tax Advisers is one of two firms dominating the Netherlands Antilles market for international work, both on- and offshore.
Spigthoff ranks high in corporate / M&A and dispute resolution.
Martijn Welten, who specializes in corporate law, mergers & acquisitions and corporate litigation, is (highly) recommended in the areas of dispute resolution and corporate/M&A.
Karel Frielink is considered a leading professional in the area of high net-worth private clients. Karel is highly recommended in the areas of corporate and M&A, …
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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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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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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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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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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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THE CUSTODY OF SECURITIES IN THE NETHERLANDS CARIBBEAN
Separate legal entity
Generally, securities that must be held by a Netherlands Antilles bank on behalf of its clients will be held by a custodian. In most cases the custodian is either a foundation (‘stichting’) or a wholly owned subsidiary (NV or BV) of the bank.
The scope of the activities of the custodian will be limited to holding shares, bonds, notes, certificates and other securities. The insolvency risk of the custodian is therefore minimized. Alternatively, these securities can also be held in the name of the custodian by independent custody companies abroad, including brokers, agents and sub-custodians. In both …
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NETHERLANDS CARIBBEAN BANK N.V. IN LIQUIDATION
Notice of Filing Final Account
Notice is hereby given that, pursuant to Section 31, paragraph 7, of the Netherlands Antilles Civil Code, on the 1st of December 2009, the liquidator’s final account has been lodged for inspection at the office of the company (Kaya W.F.G. (Jombi) Mensing 14, Curacao), at the office of the liquidator and at the commercial register of the Curacao Chamber of Commerce (Kaya Junior Salas 1, Curacao).
Karel Frielink (liquidator)
(1 December 2009)
See also De Volkskrant
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