The limited liability company (V.B.A.)
The incorporation of a V.B.A. is effected by a notarial deed of incorporation before an Aruban civil law notary (the “Deed of Incorporation”). The Deed of Incorporation can be in any language that the civil law notary understands. The V.B.A. is incorporated by one or more persons. There is no legal requirement for the incorporator(s) to participate in the issued capital at incorporation. The by-laws of the V.B.A. can be set out in the articles of association or in separate regulations (“Regulations”). Therefore, the articles of association can be very concise.
The civil law notary must send the required documents (including the Deed of Incorporation) to the Trade Register of the Aruba Chamber of Commerce and Industry (the “Chamber of Commerce”) for the registration of the V.B.A. in the Commercial Register and publish the incorporation in the Official Gazette of Aruba.
For the V.B.A. there are no legal requirements as to a maximum authorized and a minimum paid up capital. In the articles of association, it can be determined that some or all of the shares shall have a nominal value. Certain business activities. In the articles of association, it can be determined that some or all of the shares shall have a nominal value. Certain business activities (e.g. insurance companies) are required to have a minimum issued share capital as stipulated in that policy.
The V.B.A. (and as per 1 February 2012, also the N.V. and A.V.V.) can only have registered shares. Unless provided otherwise in the articles of association, a (collective) share certificate may be issued to the (legal) person acquiring the share or shares.
The board of managing directors must keep a regularly updated shareholders register (the “Register”). Unless the articles of association or the Regulations determine that there are different types of shares, all shares are regarded to have equal rights and obligations attached to them. At least one share with full voting and dividend rights, or one share with full voting rights and one with dividend rights must be issued to another party than the VBA itself. The articles of association can provide that the share capital of the VBA is in a foreign currency.
As of 1 February 2012 (and for existing V.B.A.’s as of 1 February 2013) the Register must be filed with the Chamber of Commerce. The Register is not available to the general public but will be made available for inspection by the Chamber of Commerce to appointed authorities upon request of such appointed authorities. Such authorities and the Chamber of Commerce may not make the Register public without the permission of the V.B.A.
The V.B.A. is managed by one or more managing directors (bestuurders). At incorporation the managing directors are appointed for the first time. After the incorporation the general meeting of shareholders is in general authorized to appoint, and if the articles of association or the Regulations so determine, elect the managing directors. If stipulated in the articles of association or the Regulations, the appointment of one or more managing directors is done by specified shareholders or general meeting of shareholders. The articles of association or the Regulations may also determine that the appointment of managing directors takes place by means of a binding nomination. Unless determined otherwise in the articles of association or Regulations, the general meeting of shareholders may overrule such binding nomination with two thirds of the votes representing more than half of the issued capital. Managing directors are dismissed by the corporate body entrusted with the appointment of the managing directors. The authority to dismiss may be granted to another corporate body.
Managing directors can be natural persons or legal entities. The V.B.A. must in principle at all times be represented by a legal representative (wettelijke vertegenwoordiger), which must be an Aruban N.V. with a license from the Central Bank of Aruba to operate as a trust service provider. The legal representative of the V.B.A. is not a managing director, although he has the authority to report to, register and file at the commercial register, submit tax returns, issue share certificates, request a business license and to maintain contacts with the Aruban authorities. The requirement to have a legal representative does not apply if the V.B.A. has (a) one or more natural person(s) as managing directors who is/are resident(s) of Aruba or (b) a legal entity as managing director which has at least one direct or indirect natural person as managing director who is a resident of Aruba.
The board of managing directors represents the V.B.A., defines business policy and manages its affairs. All managing directors are individually authorized to represent the V.B.A., unless the articles of association provide otherwise. Limitations or exceptions to the authority to represent the V.B.A. in the articles of association can be invoked against third parties who were unaware of such limitation/exception if the articles of association including such limitation/exception were properly registered with the Chamber of Commerce at the time that the legal act (rechtshandeling) took place. The aforementioned limitations/exceptions to the authority to represent the V.B.A can not be made in the Regulations.
If provided for in the articles of association or Regulations, a V.B.A. may have one or more members of the board of directors charged with the management (provided the number is lesser than half of the management board) and the remaining members of the board of directors charged with the supervision of the management (“one-tier board”). The articles of association or Regulations may also provide for a supervisory board of directors (Raad van Commissarissen) (“two-tier board”) to oversee the management of the V.B.A. and to advise and supervise the managing directors, unless the VBA has opted for a one tier board. In principle the supervisory board of directors consists of natural persons. The supervisory board of directors is entitled to suspend managing directors and if provided in the articles of association to dismiss managing directors. Unless the articles of association provide otherwise, the members of the supervisory board are appointed by the general meeting of shareholders. The legal provisions regarding the appointment, suspension and dismissal of supervisory directors are the same as for managing directors, except that for supervisory directors the articles of association may provide that the authority to appoint one or more supervisory directors to a maximum of 1/3 of the total board of supervisory directors, is granted to others.
The general meeting of shareholders of a V.B.A. has, amongst others, the following powers:
- to amend the articles of association and the Regulations;
- to appoint, suspend or dismiss the managing directors;
- to appoint, suspend or dismiss the supervisory board;
- to approve the financial statements;
- to declare dividends and other capital distributions;
- to convert the V.B.A. into a N.V.
- to merge (fuseren) with or split-up (splitsing) into other legal entities;
- to dissolve the VBA;
- to resolve to file for bankruptcy or suspension of payments; and
- all other powers that have not been assigned by law, the articles of association or the Regulations to another corporate body.
A general meeting of shareholders should be held at least once a year to approve the financial statements. The financial statements and explanatory notes thereto should be made available by the management board for review by the shareholders from the day the meeting is called to approve the financial statements.
Unless otherwise determined in the articles of association or Regulations the announcement to attend the shareholders meeting should be made by means of an invitation in writing sent to the address of the shareholders. Every shareholder and every person entitled to vote in the general meeting of shareholders is entitled to attend the shareholders meeting. Attendance by proxy is permitted.
Valid resolutions can also be adopted outside a meeting, provided that the votes are cast in writing and all persons entitled to attend a meeting agree with the decision making process outside of a meeting. Unless the articles of association or Regulations determine otherwise, the same rules for adopting resolutions in a meeting applies to adopting resolutions outside a meeting.
The financial year of a V.B.A. is the calendar year, unless otherwise stipulated in the articles of association.
Each year the board of managing directors has to draw up financial statements within eight months after the lapse of the financial year. The general meeting of shareholders may extend this term to a maximum of six months. The financial statements consist of at least a balance sheet, a profit and loss account, and an explanatory note to these statements. The statements have to be signed by all managing directors and by the supervisory directors, if any are in place. In the event one or more managing directors and supervisory directors do not sign the statements, the reason(s) therefore must be stated.
The V.B.A. must file the financial statement with the Chamber of Commerce within eight days after it has been approved by the shareholders, or within eight days after it should have been approved. The financial statements will be made available by the Chamber of Commerce to appointed authorities for inspection upon request of such appointed authorities. Such authorities and the Chamber of Commerce may not make the financial statements public without the permission of the V.B.A.
Profits and distributions
The net profits of a V.B.A. are at the disposal of the shareholders and other persons entitled to profit sharing (if any). In the articles of association it can be determined that upon adopting the financial statements the shareholders or another corporate body decides in direct connection with the approval of the financial statements whether to declare a dividend or to reserve (part of) the profits. The shareholders or another corporate body appointed to do so in the articles of association may decide to declare interim dividends from current year profits or from profits stated in financial statements which has not yet been approved. Dividends and other capital distributions cannot be made if the equity capital is or becomes negative as a result of such distributions. If the V.B.A. wishes to make a dividend distribution which would result in the equity capital becoming negative, then the capital or reserves reduction procedure as determined by law should be followed.