MORATORIUM OF PAYMENTS IN THE DUTCH CARIBBEAN (I)
An opportunity to recover
Many companies face financial difficulties. Sometimes bankruptcy is the only option. The goal of the bankruptcy is the liquidation of the assets of the company and not to save the business, and this procedure is, therefore, not always the best procedure for realizing the full value of the company as a going concern.
Under the laws of the Netherlands Antilles, a temporary suspension or moratorium of payments (‘surséance van betaling’) is a general suspension of a debtor’s obligations ordered by the court. Only the debtor himself may request a moratorium, on the grounds that he is unable to …
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OFFICE DISBURSEMENTS IN THE DUTCH CARIBBEAN
Not always charged at actual cost
Most law firms charge their fees on the basis of hourly rates, which are determined by the seniority of the attorneys involved. It is also standard practice for Netherlands Antilles law firms to charge office disbursements separately as a percentage, e.g. 6%, of their legal fees. Such disbursements comprise, amongst other things, phone and fax costs, secretarial support, including overtime, and photocopying.
Only specific expenses and disbursements, e.g. bailiff costs, court costs, courier costs, translation costs and travel costs, are charged at actual cost. Most clients expect a law firm obtain prior approval regarding all ‘unexpected’ major …
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CORPORATE PENSION FUNDS IN THE DUTCH CARIBBEAN
Only legal entities may serve as a fund
According to the Netherlands Antilles National Ordinance on Corporate Pension Funds only legal entities may serve as a corporate pension fund. The foundation (‘stichting’) is the legal form most used for these purposes.
The main reason for using a foundation instead of a legal entity of which the equity is divided in shares is that there are no shareholders interest which could conflict with the interest of the participants in the pension fund.
Furthermore, Netherlands Antilles corporate law includes some specific provisions for foundations that are used as a pension fund. Participants …
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DUTCH CARIBBEAN COMPANIES AND LIABILITY ISSUES
Shareholders are not personally liable
Shareholders of an NV or BV are not personally liable for the liabilities of the company, except where this would be contrary to the law. With the exception of actions based on tort or when a shareholder may be held liable because he is considered a policy maker (see below), in general, the shareholders only obligation is to pay to the company the consideration for the share issue, i.e. a payment on the shares.
The members of the board of directors are personally and severally liable towards the company for any loss caused by the …
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DIRECTORS OF A DUTCH CARIBBEAN COMPANY
May a director resign when he chooses to do so?
A Netherlands Antilles company (NV or BV) must have either a local director or a local representative. A company is not required to have more than one director, unless the articles of association provide otherwise. The Netherlands Antilles Corporate Code does not oblige the shareholders to appoint new board members once all board members have resigned.
Pursuant to Article 2:12(1) Netherlands Antilles Civil Code, the articles of association of the company must provide for the manner in which provisions are made for the interim management and administration of the company …
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VOLUNTARY DISSOLUTION OF A DUTCH CARIBBEAN COMPANY
Dissolution requires a shareholders’ decision
The shareholders of a Netherlands Antilles company may voluntarily decide to dissolve a company (NV or BV), which requires a shareholders’ resolution in accordance with the articles of association.
Publication of the dissolution of the company in the ‘Curaçaosche Courant’ (the Official Gazette of the Netherlands Antilles) by the liquidator (a.k.a. receiver) is mandatory. As is the registration of the dissolution and deregistration of the directors at the commercial register of the Chamber of Commerce.
Under Article 2:30(1) Netherlands Antilles Civil Code, the liquidator realizes the assets of a company and settles all liabilities of …
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EMERGENCY MEASURES FOR CREDIT INSTITUTIONS IN THE DUTCH CARIBBEAN
The Central Bank has certain regulatory powers
Not all banks perform well. Sometimes things go wrong. In the Netherlands Antilles the Central Bank has certain powers to take over control, if necessary. The Central Bank may request the Court of First Instance to subject a bank (credit institution) to the emergency measure pursuant to Article 28 of the National Ordinance on the Supervision of Banking and Credit Institutions 1994.
The court may authorize the Central Bank to transfer all or part of the obligations of the credit institution and to partially or entirely liquidate the credit institution. The authorization shall …
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STATUTORY MERGERS UNDER THE LAWS OF THE DUTCH CARIBBEAN
Mergers mostly within a group of companies
A statutory merger involves at least two legal entities. The law uses the terms acquiring and disappearing legal entity. The law specifies that only legal entities having the same legal form may merge, specifying that a BV (closed limited liability company) and a NV (public limited liability company) are considered to be the same. Statutory mergers are used mostly within a group of companies.
Essential for a statutory merger is that the title of all assets and liabilities of one legal entity transfer in their entirety to another legal entity. An actual transfer …
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MAY LAWYERS SEARCH FOR METADATA IN DOCUMENTS RECEIVED FROM OPPOSING COUNSEL?
A lawyer may ethically review a document for metadata
Lawyers frequently send and receive documents or computer files in electronic form. An electronic document typically includes data that may or may not be visible when viewing the document on the computer screen or as printed out, e.g. the original author’s name, the creation date of the document, and the amount of time spent editing it. These hidden data are called “metadata”.
Legal Blog Watcher Robert J. Ambrogi discusses the question whether it is ethical to search for metadata in a document you receive from …
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INVESTMENT COMPANY REGULATIONS IN THE DUTCH CARIBBEAN
Holding companies are not investing
An investment company (NV or BV) is a company that raises or obtains pecuniary means or other property to be used for collective investment with the objective of allowing the participants to benefit from the revenues of those investments.
The Netherlands Antilles National Ordinance on the Supervision of Investment Institutions and Administrators (‘Landsverordening Toezicht Beleggingsinstellingen en Administrateurs’) and the Central Bank’s policy guidelines based thereon do not make entirely clear what is regarded as an “investment”.
The explanatory memorandum to the Ordinance explains that certain activities do not tend to be considered as “investments”, such …
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HARRY POTTER AND THE BATTLE OVER COPYRIGHT LAWS
Can the author come up with a legal spell to prevent the publishing of a HP encyclopedia?
J.K. Rowling is the renowned author of the famous fantasy books about the life of wizardry student Harry Potter. Since the release of the first book in 1997, the series have gained huge popularity worldwide. The books have spawned a series of Potter movies, Potter video games and themed merchandise. The commercial success of the Potter brand has made Rowling one of the highest-earning authors in history. Like with many popular and commercially successful products, there are …
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TRUST COMPANIES IN THE DUTCH CARIBBEAN
Rendering trust services without a license is prohibited
Many international group structures include one or more Dutch Caribbean legal entities or partnerships. The main reasons for this are the internationally competitive conditions for business development in the area of corporate law, the tax system, and the well-developed professional financial services industry of the Netherlands Antilles. Trust companies are involved in setting up and maintaining such structures. On behalf of other enterprises, trust companies conduct the management of ‘international companies’, i.e. companies established in the Netherlands Antilles which, however, on many occasions are (factually) controlled by persons or legal entities from …
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