CONVERSION OF A DUTCH CARIBBEAN LIMITED LIABILITY COMPANY
An NV may be converted into a BV and vice versa
The Netherlands Antilles Civil Code provides for an NV to be converted into a BV and vice versa. Conversion does not terminate the existence of the legal entity.
Conversion requires a resolution. A resolution to convert and to amend the articles has to be adopted, if only to satisfy similar requirements as for a resolution to amend the articles. The conversion shall become effective by execution of a notarial deed of conversion, and said deed must contain the new articles of association.
A conversion balance sheet must be attached to …
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THE RIGHT TO SHARE IN THE PROFITS OF THE ARUBA COMPANY WITH LIMITED LIABILITY
It is not necessary to give all shares a right to share in the profits
On January 1, 2009 the new Aruba Ordinance on the company with limited liability (vennootschap met beperkte aansprakelijkheid; VBA) became effective. This legislation gives shareholders far more freedom to organize their company than in the past
It is not necessary to give all shares a right to share in the profits (Section 38 par. 5 Ordinance). If shares have a par value, it is obvious that the right to share in the profits is related to that value. If there are shares with different par …
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THE SHAREHOLDERS REGISTER OF A DUTCH CARIBBEAN LIMITED LIABILITY COMPANY
Shareholders may inspect the register
Every shareholder of a Netherlands Antilles NV or BV may inspect the register of the company regarding the shares held by them. The articles of association of a particular company may confer the right for inspection on others. In most cases a shareholder may however only inspect the register of the company in so far as the shares held by him are concerned.
Shareholders, who alone or jointly with other shareholders, may cast at least ten percent of the votes with regards to a specific matter, may request in writing that the management or supervisory …
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PIERCING THE CORPORATE VEIL IN THE DUTCH CARIBBEAN
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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THE MANAGEMENT BOARD OF A DUTCH CARIBBEAN CORPORATION
The concept of corporate officers is unknown
The management board has the function of managing the corporation, i.e., making policy and conducting the day-to-day management of the corporation. The management board is responsible for the management of the BV and is authorized to represent it, except where restricted by the articles of incorporation.
The management board is the corporation’s centre of gravity. The management board of a Netherlands Antilles corporation combines the functions of executive directors and senior officers in a U.S. corporation, unless the articles provide for a single-tier board. There is no position equivalent to that of chief …
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PREJUDICED INTERESTS OF MINORITY SHAREHOLDERS IN THE DUTCH CARIBBEAN
A minority shareholder may force the company to take-over his shares
Article 2:251(1) 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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DRAG-ALONG RIGHTS UNDER THE LAWS OF THE DUTCH CARIBBEAN
Drag-along rights may be validly created
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 (NV or BV). 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 Dutch Caribbean law is whether the articles of association of an NV or BV may contain drag-along provisions.
Article 2:257(1) of the Netherlands Antilles Civil Code reads as follows: “The articles may provide that, in cases to be …
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PRE-EMPTION RIGHTS IN THE DUTCH CARIBBEAN
Prevent a shareholder from dilution
According to article 2:106 of the Netherlands Antilles Civil Code shareholders have a pre-emption right on the issue of new shares, being the right to be offered any new issue in each class, pro rata to the number of shares of such class held by them. The pre-emption right is intended to protect the interests of shareholders and to prevent their stake from being diluted.
According to the Civil Code there are three ways to limit the pre-emption rights of the shareholders:
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