DECLARING DIVIDENDS IN THE DUTCH CARIBBEAN
Resolutions only marginally examined by the court
Directly connected to the approval of annual accounts, the general meeting of the NV (or BV, as the case may be) or any other body designated in the articles of incorporation, shall resolve the distribution or reservation of profits according to aforementioned annual accounts and the payment of any other distributions flowing from the equity capital as apparent from the annual accounts. The general meeting, or any other body designated in the articles, may resolve to pay interim distributions for the account of the current financial year or for the account of a …
Read the rest »
DUTCH CARIBBEAN PRIVATE INTERNATIONAL LAW
The legal effects doctrine: an exception to the lex loci delicti rule
Under Dutch Caribbean rules of private international law, a claim arising from an unlawful act is governed, in the absence of a choice of jurisdiction by the parties, by the law of the country were the unlawful act was committed (lex loci delicti). However, this rule may possibly not apply if the tortfeasor and the injured party are both residing in a country other than that where the unlawful act was committed and if the legal effects occur entirely in the other country. This is the so-called legal …
Read the rest »
INADEQUATE CAPITALIZATION IN THE DUTCH CARIBBEAN
Liability for thin-capitalization?
In terms of ‘piercing the corporate veil’, thin or inadequate capitalization usually means capitalization that is not in proportion to the nature of the risks the business of the corporation necessarily entails; in other words it is based on likely economic needs rather than legal requirements.
Shareholders of a company in the Netherlands Antilles are under an obligation to pay to the company what is due with respect to the shares, i.e. the shareholder’s capital contribution, and such contribution may not be withdrawn without due process. This is the only financial obligation of a shareholder towards the …
Read the rest »
THE FINANCIALS OF A DUTCH CARIBBEAN COMPANY
Management’s responsibility
According to Netherlands Antilles law, annually, within eight months after the company’s financial year has ended, (unless this term has been extended by the general meeting) annual statements must be drawn up by the management board and submitted to the general meeting of shareholders. The annual statements, comprising the balance sheet, profit and loss account and an explanatory statement, should be signed by all the directors.
The annual statements should be approved by the general meeting of shareholders. Said meeting can and, when this is prescribed by the articles of association, shall appoint an expert to regularly supervise the bookkeeping and to report to …
Read the rest »
MORATORIUM OF PAYMENTS IN THE DUTCH CARIBBEAN (II)
The debtor may make an offer of composition
The nature of a Netherlands Antilles’ moratorium differs substantially from a moratorium under US law and does, in particular, not cause pending proceedings to be stayed. Generally, a moratorium in the Netherlands Antilles protects a debtor from claims existing at the time of the moratorium. It does not prevent litigating such claims, but judgments obtained cannot be enforced.
During a moratorium, the creditor is prevented from enforcing ordinary agreements against the party to which the moratorium is granted. Instead, creditors may file their claims with the administrator in the moratorium. If the performance of the …
Read the rest »
MORATORIUM OF PAYMENTS IN THE DUTCH CARIBBEAN (I)
An opportunity to recover
Many companies face financial difficulties. Sometimes bankruptcy is the only option. The goal of the bankruptcy is the liquidation of the assets of the company and not to save the business, and this procedure is, therefore, not always the best procedure for realizing the full value of the company as a going concern.
Under the laws of the Netherlands Antilles, a temporary suspension or moratorium of payments (‘surséance van betaling’) is a general suspension of a debtor’s obligations ordered by the court. Only the debtor himself may request a moratorium, on the grounds that he is unable to …
Read the rest »
OFFICE DISBURSEMENTS IN THE DUTCH CARIBBEAN
Not always charged at actual cost
Most law firms charge their fees on the basis of hourly rates, which are determined by the seniority of the attorneys involved. It is also standard practice for Netherlands Antilles law firms to charge office disbursements separately as a percentage, e.g. 6%, of their legal fees. Such disbursements comprise, amongst other things, phone and fax costs, secretarial support, including overtime, and photocopying.
Only specific expenses and disbursements, e.g. bailiff costs, court costs, courier costs, translation costs and travel costs, are charged at actual cost. Most clients expect a law firm obtain prior approval regarding all ‘unexpected’ major …
Read the rest »
CORPORATE PENSION FUNDS IN THE DUTCH CARIBBEAN
Only legal entities may serve as a fund
According to the Netherlands Antilles National Ordinance on Corporate Pension Funds only legal entities may serve as a corporate pension fund. The foundation (‘stichting’) is the legal form most used for these purposes.
The main reason for using a foundation instead of a legal entity of which the equity is divided in shares is that there are no shareholders interest which could conflict with the interest of the participants in the pension fund.
Furthermore, Netherlands Antilles corporate law includes some specific provisions for foundations that are used as a pension fund. Participants …
Read the rest »
DUTCH CARIBBEAN COMPANIES AND LIABILITY ISSUES
Shareholders are not personally liable
Shareholders of an NV or BV are not personally liable for the liabilities of the company, except where this would be contrary to the law. With the exception of actions based on tort or when a shareholder may be held liable because he is considered a policy maker (see below), in general, the shareholders only obligation is to pay to the company the consideration for the share issue, i.e. a payment on the shares.
The members of the board of directors are personally and severally liable towards the company for any loss caused by the …
Read the rest »
DIRECTORS OF A DUTCH CARIBBEAN COMPANY
May a director resign when he chooses to do so?
A Netherlands Antilles company (NV or BV) must have either a local director or a local representative. A company is not required to have more than one director, unless the articles of association provide otherwise. The Netherlands Antilles Corporate Code does not oblige the shareholders to appoint new board members once all board members have resigned.
Pursuant to Article 2:12(1) Netherlands Antilles Civil Code, the articles of association of the company must provide for the manner in which provisions are made for the interim management and administration of the company …
Read the rest »
VOLUNTARY DISSOLUTION OF A DUTCH CARIBBEAN COMPANY
Dissolution requires a shareholders’ decision
The shareholders of a Netherlands Antilles company may voluntarily decide to dissolve a company (NV or BV), which requires a shareholders’ resolution in accordance with the articles of association.
Publication of the dissolution of the company in the ‘Curaçaosche Courant’ (the Official Gazette of the Netherlands Antilles) by the liquidator (a.k.a. receiver) is mandatory. As is the registration of the dissolution and deregistration of the directors at the commercial register of the Chamber of Commerce.
Under Article 2:30(1) Netherlands Antilles Civil Code, the liquidator realizes the assets of a company and settles all liabilities of …
Read the rest »
EMERGENCY MEASURES FOR CREDIT INSTITUTIONS IN THE DUTCH CARIBBEAN
The Central Bank has certain regulatory powers
Not all banks perform well. Sometimes things go wrong. In the Netherlands Antilles the Central Bank has certain powers to take over control, if necessary. The Central Bank may request the Court of First Instance to subject a bank (credit institution) to the emergency measure pursuant to Article 28 of the National Ordinance on the Supervision of Banking and Credit Institutions 1994.
The court may authorize the Central Bank to transfer all or part of the obligations of the credit institution and to partially or entirely liquidate the credit institution. The authorization shall …
Read the rest »