DISCHARGING THE MANAGEMENT BOARD

Only for matters evident from the accounts

The shareholders of a Dutch Caribbean limited liability company (NV or BV) may provide a discharge (décharge) to members of the management board for matters evident from the annual accounts, or matters otherwise made known to the general shareholders meeting. This is a standard item on the agenda for shareholders meetings at which a company’s annual accounts are adopted.

The aim of this discharge is that the company generally has no longer a legal cause of action against a management board member.

The effect of a discharge is limited. A discharge does not …
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18
Jan 2016
CATEGORY

Corporate

COMMENTS No Comments

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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28
Feb 2014
CATEGORY

Corporate

COMMENTS No Comments

GOVERNMENT-OWNED COMPANIES

Opposing views on political influence

Few people would argue that the rules issued by the state (government) must also be correctly and strictly observed by that same state. It cannot be well conceived that, for example, the police and Public Prosecutor’s Office (as instruments of the state) should be allowed to violate the law with impunity.

Though there may be very different opinions about the nature and the role of the state (particularly from a philosophical and jurisprudential viewpoint), here we address the question of how we should consider government-owned companies, and in particular, what level of influence the government …
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17
Feb 2014
CATEGORY

Corporate

COMMENTS No Comments

THE INCORPORATION OF A CURACAO LIMITED LIABILITY COMPANY

Incorporating an NV or BV is not a hassle

The act on corporate law (Book 2 Curaçao Civil Code) governs the NV (‘public limited liability company’) and BV (‘private limited liability company’). These companies can be used for group finance or holding activities, (international) joint-ventures, funds, structured finance, as a Curaçao Trust and for “plain-vanilla” (local) activities.

A notarial deed is required for the formation of an NV or BV and for any amendment to articles of association (a.k.a. articles of incorporation). Formation can however, be very quick (within one or two days if necessary) and does not require many …
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14
Feb 2014
CATEGORY

Corporate

COMMENTS No Comments

RISK MANAGEMENT AND ASSET PROTECTION

Curaçao offers legitimate risk management solutions

Why would one consider an asset protection strategy? There are individuals and business entities all around the world not trusting their government (e.g. fear for expropriation or nationalization by their government). Or they are seeking legitimate protection from any future downturns. Or they do not want the world to know about their wealth and do want to protect their privacy as much as possible. Asset protection also can be an aspect of business, personal or estate planning.

It is quite common that limited liability companies are used for operating a business. The alternative, a …
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02
Feb 2014
CATEGORY

Finance

COMMENTS No Comments

IMPACT OF THE LIABILITY TO THE DIRECTOR OF THE DIRECTOR (I)

Liability of the 2nd degree director

Under Section 2:17 subsection 1 of the Curaçao Civil Code, the liability of a legal entity as a director of another legal entity (the direct or 1st degree director) also rests jointly and severally on each person who at the time this liability arose for the legal entity was its director (the indirect or 2nd degree director). It applies to this indirect director as it applies to the direct director that he will not be liable if he can prove that he cannot be blamed for the improper performance of duties, also considering his …
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04
Sep 2013
CATEGORY

Corporate

COMMENTS No Comments

ORDER OF THE COMMON APPEAL COURT OF CURACAO CONCERNING THE RIGHT TO INSTITUTE AN INQUIRY

The Appeal Court has taken several fundamental decisions

On 5 March 2013 the Common Court of Justice of Aruba, Curacao, Sint Maarten and of Bonaire, Sint Eustatius and Saba (case: Ghis 55769 – HAR 28/12) issued an order in connection with inquiry proceedings. This order contains three major considerations.

The right of legal entities (including public limited companies [NV] and private companies with limited liability [BV]) to institute an inquiry was introduced in Curacao on 1 January 2012. Almost immediately after this introduction an application for instituting inquiry proceedings was submitted to the Appeal Court. The facts …
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07
Mar 2013
CATEGORY

Corporate

COMMENTS No Comments

BESCHIKKING INZAKE ENQUETERECHT GEMEENSCHAPPELIJK HOF CURACAO

Het Hof neemt enkele principiële beslissingen

Op 5 maart 2013 heeft het Gemeenschappelijk Hof van Justitie van Aruba, Curaçao, Sint Maarten en van Bonaire, Sint Eustatius en Saba (zaak: Ghis 55769 – HAR 28/12) een beschikking in het kader van een enquêteprocedure gegeven. Drie belangrijke overwegingen worden hier genoemd.

Het enquêterecht voor rechtspersonen (waaronder naamloze en besloten vennootschappen) is in Curaçao op 1 januari 2012 ingevoerd. Vrijwel direct na de invoering is een enquêteverzoek bij het Hof ingediend. De feiten die aan dat verzoek ten grondslag zijn gelegd hebben betrekking op de jaren voorafgaande aan de invoering van het enquêterecht. …
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05
Mar 2013
CATEGORY

Corporate

COMMENTS No Comments

LECTURE ON GOOD CORPORATE GOVERNANCE

Looking back on the future: the further development of corporate governance in Curaçao

A seminar on Checks and Balances in Corporate Governance on Curacao, was held on Thursday February 21st, 2013. More than 125 interested managing directors, supervisory directors, lawyers, accountants and other participants were in attendance.

The seminar was organized by the Board of financial supervision (College financieel toezicht – Cft), the Foundation Bureau for Supervision and Standardization Government Entities (Stichting Bureau Toezicht en Normering Overheidsentiteiten – SBTNO) and the Dutch Caribbean Accountants Association (DCAA). I had the honor to speak on the present and future of the Corporate …
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28
Feb 2013
CATEGORY

Corporate

COMMENTS No Comments

TAKING OVER CONTROL OF A CURACAO COMPANY THROUGH A FOREIGN COURT DECISION

The powers of a foreign appointee will not be recognized

According to Curacao private international law, the appointment and dismissal of board members of a company as well as decisions limiting their powers is governed by the laws of the jurisdiction under which the company is incorporated. Accordingly, the appointment and dismissal of a board member of a Curacao limited liability company (NV or BV) as well as any limitation in respect of his powers must take place in accordance with Curacao law.

In the event a Curacao company has a foreign branch, e.g. in the United States, such company …
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08
Feb 2013
CATEGORY

Corporate

COMMENTS No Comments

INADEQUATE CAPITALIZATION OF A CURACAO COMPANY

Liability for thin-capitalization?

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.

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. In almost all jurisdictions, undercapitalization as such is …
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16
Aug 2012
CATEGORY

Corporate

COMMENTS No Comments

GOVERNMENT AND CORPORATE GOVERNANCE (V)

Government drafted model articles of association

The first model articles of association date from March 15, 2011.

For criticism see: K. Frielink, Visie Land op overheids-NV’s verkeerd [Vision Country on government-owned NVs incorrect], Antilliaans Dagblad 15 April 2011, p. 16 and M.L. Alexander, F.B.M. Kunneman, L.G. Santine and R.J. in ’t Veld, Modelstatuten ten sterkste afgeraden [Model articles of association strongly discouraged], Antilliaans Dagblad 20 September 2011, p. 14-15. See also K. Frielink, Stop politieke benoemings- en ontslagcarrousel [Stop politicial appointment and dismissal merry-go-round], Antilliaans Dagblad 14 September 2010, p. 14-15.

In the meantime, the models for …
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21
Jun 2012
CATEGORY

Corporate

COMMENTS No Comments