CROSS BORDER CONVERSION AND MERGER (part 5)
Aruba
Aruba has already been ‘a foreign country’ for quite some time compared with Curacao for instance. After Aruba left the Netherlands Antilles, a transfer of seat to or from the Netherlands Antilles was no longer possible. If there was a desire to transfer the seat of a company registered in Aruba to Curacao or the other way around, this had to be done via a detour for instance first a transfer of seat to the Cayman Islands and then a transfer through to Curacao or Aruba respectively.
On 1 January 2009 the company with limited liability (VBA) was introduced …
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CROSS BORDER CONVERSION AND MERGER (part 4)
From Bonaire to the Netherlands?
In 2011 attempts were made to transfer a BV with its registered seat in Bonaire to Rotterdam by means of an amendment to the articles of association whereby the old registered seat was replaced by the new one and the articles of association of the BV were organized according to the Dutch Book 2 of the Civil Code. The Chamber of Commerce in Rotterdam refused the registration of that BV. The Chamber of Commerce held the view that this course of events contravened the Act of the Kingdom on the Voluntary Transfer of Seat and …
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CROSS BORDER CONVERSION AND MERGER (part 3)
Within the Kingdom
Under the Transfer of Seat Ordinance it is for instance impossible to transfer to Aruba or St. Maarten. Article 38 paragraph 4 of the Charter of the Kingdom of the Netherlands provides that the subject of transfer of seat of legal entities must be regulated in a Kingdom Act. Agreement between the governments of the countries is required for this provision. For as long as that subject has not been regulated in a Kingdom Act, a transfer of seat within the Kingdom is not possible; because cross-border conversion can be materially equated with it, it is assumed …
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CROSS BORDER CONVERSION AND MERGER (part 2)
Transfer of the seat
The cross-border conversion was already known in the past as the doctrine of the transfer of the seat. Just a few words about this.
The transfer of seat had been regulated in the Transfer of Seat to Third Countries Ordinance (Landsverordening zetelverplaatsing derde landen). This Ordinance was repealed as from 1 March 2004 onwards; this system has been replaced by the cross-border conversion system. However, see Section II of the Repair Act of 24 December 2004, P.B. 2004, 198, which revives this Ordinance for certain companies: in the event that a public limited company (NV) had, …
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CROSS BORDER CONVERSION AND MERGER (part 1)
Recent developments
The Netherlands Antilles ceased to exist as a country on 10 October 2010. Curacao and Sint Maarten have become independent countries within the Kingdom of the Netherlands, just as Aruba had already been for quite some time. Bonaire, St. Eustatius and Saba have become extraordinary municipalities of the Netherlands. These constitutional changes have resulted in far-reaching consequences for the cross-border conversion and cross-border merger of legal entities.
This posting is based on Book 2 of the Curacao Civil Code as applicable from 1 January 2012 onwards. As with the merger and split, the conversion has been regulated in …
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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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TERMINATION OF EMPLOYMENT AGREEMENT AND REDUNDANCY
Termination by mutual consent is preferable
In general, Curacao labor law provides for the following ways to terminate an employment agreement: (i) termination by giving notice, (ii) dissolution by the Courts and (iii) termination by mutual consent.
Prior to giving notice, an employer must obtain a permit from the Director of the Directorate of Labor Affairs. The Director will determine whether there is a valid reason for the dismissal. In the case of redundancy the employer is obliged to provide a detailed financial justification thereof. If in agreement, the Director of the Directorate of Labor Affairs may issue a permit …
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TRUST SERVICE PROVIDERS IN CURACAO
TSPs are supervised by the Central Bank
Many international group structures include one or more Curacao legal entities or partnerships. The main reasons for this are the internationally competitive conditions for business development in the area of corporate law and the tax system in Curacao, as well as the well-developed professional financial services industry. Trust Service Providers (“TSPs”) are involved in setting up and maintaining such structures. TSPs conduct the management of legal entities and partnerships (“client companies”) on behalf of other enterprises. Management usually involves the TSP acting as manager of the client company and providing a correspondence address …
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THE DUTCH CARIBBEAN AND ROME I AND ROME II
Nothing has changed as of 10-10-10
The Country the Netherlands Antilles consisted of Bonaire, Curacao, St. Maarten, St. Eustatius and Saba, and formed part of the Kingdom of the Netherlands. On October 10, 2010 the Netherlands Antilles ceased to exist as a country. Two new countries were born on that date: the country Curacao and the country St. Maarten. The three remaining islands (Bonaire, St. Eustatius and Saba, a.k.a. the BES-islands) became special overseas territories (sort of municipalities) of the Netherlands. The question is whether the new status of the islands mentioned means that treaties to which the Netherlands is …
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INTERNATIONAL NON-CONTRACTUAL LIABILITY FROM A DUTCH PERSPECTIVE
Introduction
Financial law is not an exclusively national affair. Cross-border transactions and service provisions have been common place for a very long time. Harmonisation of rules has been worked towards in a European context for decades. Leaving aside special subject matters such as liability for products and road accidents, the (partial) harmonisation of the rules in respect of the cross-border tort (wrongful act) has only relatively recently been realised.
Rome II, which concerns the law applicable in respect of non-contractual obligations, has been in force in the Netherlands since 11 January 2009. It applies to non-contractual obligations which have arisen after that …
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GOOD CORPORATE GOVERNANCE REVISITED
Where these rules not designed to protect companies from the government?
It has been my opinion for many years already that government-owned companies should be kept out of the political sphere as much as possible, so that they may benefit from a commercial, businesslike and market-oriented management. In doing so they also run less of a risk of being milked or used as political toys.
When the current government of Curacao came into power a couple of months ago, it made it very clear, right from the beginning, that it intended to dismiss all and any supervisory directors of both …
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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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