THE DUTCH CARIBBEAN INCORPORATION DOCTRINE
The courts apply the law of the state where the legal entity was incorporated
The Netherlands Antilles adheres to the Incorporation Doctrine (Netherlands Antilles State Ordinance of 9 September 1960, which entered into force on the 10th of September 1960, P.B. 1960, 166). According to this doctrine, the internal affairs of a corporation are governed solely by the laws of the state in which it was formally incorporated. This doctrine was confirmed in the cases of Natco Trust v. mr Thesseling q.q., Hoge Raad (Dutch Supreme Court) 20 April 1990, NJ 1991, 560; TAR-Justicia 1 (1991), p. 24-35, and IBC …
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PREJUDICED INTERESTS OF MINORITY SHAREHOLDERS IN THE NETHERLANDS ANTILLES
They may force the company to take-over their shares
Article 2:251(1) of the 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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GROUP RESTRUCTURING AND REFINANCING
Plan and act prudently: better to be safe than sorry
Especially in these times of global economic and financial turmoil, a group (or part thereof) might want to consider restructuring and refinancing its operations or may be already in the process of doing so. When considering or carrying out such plans, careful thought must be given to potential (legal) risks involved. For instance, in many jurisdictions specific statutory provisions exist regarding fraudulent preference actions, i.e. actions that prejudice (specific) creditors. Such provisions often also apply in full with respect to (individual companies belonging to) a group of companies, and should …
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TRANSFERS FOR NO CONSIDERATION UNDER THE LAWS OF THE DUTCH CARIBBEAN
The law protects creditors
In general the law in the Netherlands Antilles does not prohibit transfers for no consideration. It should however be pointed out that under Netherlands Antilles law, statutory provisions exist which ensure that transactions whose only reason is to disadvantage creditors or make it impossible for them to seek recourse, may not be performed out. For example, Section 3:45, paragraph 1, of the Civil Code states that if, in the performance of a legal act to which he is not obligated, an obligor, knew or ought to have known that this would adversely affect the possibility of …
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