A CORPORATION AND ITS ALTER EGO
Piercing or lifting the corporate veil
As a general rule under Curaçao law, shareholders of corporate entities with limited liability do not risk more than their capital contribution. Such shareholders cannot be held liable for their corporations’ debts or obligations. These corporations are recognized as legal entities separate from their shareholders and managing directors. However, in exceptional cases, the veil of limited liability is pierced and a corporation’s debts or obligations are attributed to the shareholder, which may be a parent corporation.
The distancing of shareholder from corporation allows for individuals to engage in business while limiting their personal liability …
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LIFTING THE CORPORATE VEIL IN ARUBA
Only under exceptional circumstances
In terms of “piercing the corporate veil” and shareholders’ liability, the laws of the Netherlands and Aruba are nearly identical. As far as a tort matter concerns the laws of Aruba, Dutch case-law and Dutch legal literature should be considered as well.
In exceptional cases shareholders of an Aruba company can be liable for the company’s debts and obligations. Generally, two grounds for such liability are mentioned: a tort (onrechtmatige daad) committed by the shareholder and an “alter ego” situation (vereenzelviging) as regards the shareholder and his company. Under Aruba law, both can be categorized under …
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INADEQUATE CAPITALIZATION OF AN ARUBAN COMPANY
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 Aruba 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what is due with respect to the shares, i.e. the shareholder’s capital contribution, and such contribution may not be withdrawn without due process.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 company, unless …
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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 …
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