THE ULTIMATE CORPORATE ADVENTURE (VI)
The Board can be organized as one-tier or two-tier
Except for restrictions in the articles of association of a Netherlands Antilles NV or BV, the Board of Directors is responsible for the management of the company and is authorized to represent it. The Board may consist of natural persons and/or legal entities.
The Board of the NV or BV can be organized as one-tier board or as two-tier board. In the first case (the Anglo-Saxon system) there is a Board of Directors and an Executive Board, without any personnel union being required. One or more members of the Board of Directors can also be members of the Executive Board, provided they form a minority on the Board of Directors. The Executive Board is responsible for managing the company, and also for the representation of the company, with the exception of the restrictions in the articles of association. The two-tier management structure is the traditional system in the Netherlands and the Netherlands Antilles, in which case supervision of the Board is conducted by a Supervisory Board.
Restrictions under the articles of association and legal restrictions of the representative authority can be invoked against third parties, the so-called external effect. In the so-called ‘guideline system’ in EU directives, and therefore implemented in the Netherlands, such external effect has been assigned to only a few specified restrictions of the representative authority.
Every Managing Director of the Antillean NV or BV is at all times authorized and, if requested, obliged to answer a third party whether a rule or requirement in the articles of association to which representation of the Company is subject has been met. With its statement (whether or not correct) that such a condition has been met, the possibility for the NV or BV to invoke overstepping the representative authority expires and thus the company can no longer nullify the transaction.
Karel Frielink
Attorney (Lawyer) / Partner
