The new law gives shareholders more freedom
As per April 1, 2014 the amended Corporate Code (Book 2 Civil Code) of St. Maarten entered into force. Among other things, the provisions with regard to conflicting interest have been thoroughly reviewed and strongly curtailed.
The basic rule provides that the authority with regard to legal acts in connection with lawsuits against a Managing Director rests with the Supervisory Board. If the company has no Supervisory Board, this authority rests with the general meeting or a person or body to be appointed by the general meeting for that case. With regard to a foundation this person or body is appointed by the Court at the request of any interested person (Article 2:11 paragraph 1 Corporate Code). This rule can be deviated from in the Articles of Association. It is also possible in a by-law laid down by the general meeting pursuant to the Articles of Association.
With regard to a foundation such a by-law must be laid down by a body other than the Board (Article 2:11 paragraph 2 Corporate Code). For the company limited by shares (‘NV ’) with an independent Supervisory Board within the sense of Article 2:139 Civil Code, it is not possible to deviate from Article 2:11 paragraph 1 Civil Code (Article 2:140 paragraph 5 Corporate Code).
It speaks of ‘the authority’ with regard to specific acts with a conflicting interest. This not only covers the authority to pass resolutions on this point but also the representative authority. Resolutions and acts of representative authority which are contrary to this rule are null and void. If and insofar an effect on third parties is involved, this effect is determined by Article 2:22 paragraph 2 Corporate Code. The law leaves those drawing up Articles of Association fully free to write the rule completely out or on the contrary to provide a different more encompassing rule, for instance by creating a rule for a qualitative or indirect conflicting interest.
Attorney (Lawyer) / Partner
(27 May 2014)