Guide to Doing Business
The public limited liability company (N.V.)
The public limited liability company (N.V.) is incorporated by one or more (legal) persons by executing a notarial deed before a civil law notary in Aruba. This notarial deed of incorporation constitutes the statutes and regulations governing the N.V. and the conduct of affairs, generally referred to as the articles of association. The deed of incorporation has to be executed in the Dutch language.
Once incorporated, the managing director(s) of the N.V. is (are) obliged to register the N.V. with the Chamber of Commerce. Details to be filed include the object of the N.V., its share capital and the identity of the managing directors, supervisory directors (if any) and possible attorneys-in-fact acting under (general) powers of attorney.
For the N.V. there are no legal requirements as to a maximum authorized and a minimum paid up capital since the last change in law of 2021. However, the articles of association need to confirm the classes of shares and the nominal value thereof. Contributions of capital in excess of the nominal capital are treated as share premium (“agio”). Certain business activities (e.g. insurance companies) are required to have a minimum issued share capital as stipulated in that policy.
As per 1 February 2012, the N.V. only had registered shares and rights associated therewith could no longer be exercised since 1 February 2015. Further to the recent change in law of 2021, any existing bearer shares are automatically converted to ordinary registered shares. The rights connected to these shares are suspended delivered to the company and the relevant shareholder is registered in the shareholders’ register. When such certificate has not delivered to the company before 1 January 2022, the corresponding share shall be registered in the name of the company. Until 2 January 2025, holders of bearer shares still have the opportunity to deliver their certificates to the company in exchange for a registered share.
The board of managing directors must keep a regularly updated shareholders register (the “Register”). Unless the articles of association determine that there are different types of shares, all shares are regarded to have equal rights and obligations attached to them. The articles of association can provide that the share capital of the N.V. is in a foreign currency.
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 N.V.
The N.V. 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 authorized to appoint and dismiss managing directors. Managing directors can be natural persons or legal entities. The board of managing directors represents the N.V., defines business policy and manages its affairs. All managing directors are individually authorized to represent the N.V. In many cases the articles of association determine that this is even the case in matters of conflicting interest. Limitations to the authorization to represent the N.V. can be made in the articles of association and can be invoked against third parties if properly registered with the Chamber of Commerce. The board of managing directors is responsible for the making of the annual accounts and publishing of the annual report.
If provided for in the articles of association, an N.V. may have a supervisory board of directors (Raad van Commissarissen) to oversee the management of the N.V. and to advise and supervise the managing directors. The supervisory board is appointed by the general meeting of shareholders. The articles of association may stipulate that a maximum of a third of the total members of the supervisory board by appointed by others.
In principle, the general meeting of shareholders of a N.V. has, amongst others, the following powers:
- To amend the articles of association;
- To appoint, suspend or dismiss the managing directors;
- To appoint, suspend or dismiss the supervisory board;
- To appoint an external auditor;
- To approve the financial statements;
- To declare dividends and other capital distributions;
- To dissolve the company;
- To resolve to file for a bankruptcy or suspension of payments; and
- All other powers that have not been assigned by law or in the articles of association to another corporate body.
A general meeting of shareholders should be held at least once a year. Unless otherwise determined by the articles of association, the meeting should be held within nine months after the end of the financial year of the N.V. At the general meeting, the financial statements and explanatory notes thereto should be submitted by the board of managing directors to the shareholders for approval.
Unless otherwise determined in the articles of association the announcement to attend the annual meeting should be made in an Aruban newspaper. Every shareholder is entitled to attend the shareholders meeting. Attendance by proxy is permitted. The meeting should be held in Aruba. If the articles of association so determine, the meeting may be held elsewhere, in which case valid resolutions can only be made if the whole issued share capital is represented. Unless the articles of association determines otherwise, a simple majority of votes present and represented at meetings can validly adopt resolutions with no quorum requirements.
Valid resolutions can also be adopted outside a meeting, also held outside of Aruba, 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 determines otherwise, the same rules for adopting resolutions in a meeting applies to adopting resolutions outside a meeting.
The financial year of a N.V. may be a calendar year or any other twelve-month period to be specified in its articles of association.
After the end of each financial 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 in “special circumstances”. The law does not qualify what would be considered to be a “special circumstance”. 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 supervisory directors (if any). Often the articles of association stipulate that in the event one or more managing directors do not sign the statements, the reason(s) therefore must be stated.
The N.V. 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. The authorities and the Chamber of Commerce may not make the financial statements public without the permission of the company.
Profits and distributions
The net profits of a N.V. are at the disposal of the shareholders who can either declare a dividend or reserve the profits. If the articles of association so provide, interim dividends may be declared from current year profits. Dividends and other capital distributions cannot be made if the equity capital is or becomes negative as a result of such distributions. If the N.V. wishes to make a dividend distribution which would result in the equity capital becoming negative, then the capital reduction procedure as determined by law should be followed.