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ARUBA | The limited liability company (V.B.A.)

Incorporation
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.

A certificate of no objection (the “Certificate”) is required for the incorporation of the V.B.A. The Certificate is issued by the Minister of Justice (the “Minister”). To acquire the Certificate a draft of the Deed of Incorporation must be submitted to the Minister (which is actually granted by the High Commissioner on behalf of the Minister). The Minister will issue the Certificate, unless the intention or history of the person(s) who will determine the management of the V.B.A. presents a risk that the V.B.A. will be used for illicit purposes or that its activity will harm its creditors.

Registration
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.

Share Capital
For the V.B.A. there are no legal requirements as to a maximum authorized and a minimum paid up capital. The V.B.A. may however state a maximum authorized capital in its articles of association. The shares in a V.B.A .do not have a nominal value, unless otherwise stated in the articles of association.  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 share can be issued with or without a nominal value. The articles of incorporation or the Regulations may also determine that there will be certain shares with a nominal value and others without a nominal value.

Shares
The V.B.A. (and as per 1 February 2012, also the N.V. and A.V.V.) can only have registered 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 issues.

As of 1 February 2012 (and for existing V.B.A.’s as of 1 February 2013) the Register must be filled with the Chamber of Commerce. The Register will be made available for inspection by the Chamber of Commerce to appointed authorities upon request of such appointed authorities. The authorities and the Chamber of Commerce may not make the Register public without the permission of the V.B.A..

Management
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 authorized to appoint, and if the articles of incorporation or the Regulations so determines, elect the managing directors. If stipulated in the articles of incorporation or the Regulations, the appointment or election of one or more managing directors is done by specified shareholders or general meeting of shareholders. The articles of incorporation or the Regulations may also determine that the appointment or election of managing directors takes place by means of a binding nomination. Unless determined otherwise in the articles of incorporation 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 or election of the managing directors. The authority to dismiss may be granted to another corporate body.

Managing directors can be natural persons or legal entities. Besides having one or more managing directors, the V.B.A. must in principle at all times be represented by a legal representative (wettelijke vertegenwoordiger). 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 legal representative must be a N.V. established in Aruba. Such N.V. must have (also) as its purpose acting as a legal representative of V.B.A.’s and / or A.V.V.’s, while it must also possess a corresponding business license. 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. Limitations to the authorization to represent the V.B.A. can be made in the articles of association and can be invoked against third parties if properly registered with the Chamber of Commerce. The aforementioned limitations to the authorization to represent the V.B.A can only be made in the articles of association and not 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 and one or more 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 articles of association determine otherwise, the supervisory board is appointed by the general meeting of shareholders. The supervisory directors are appointed and dismissed in the same manner as managing directors, except for the total number of supervisory directors that may be appointed by a body other than the general meeting of shareholders.

Shareholders meeting
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.
•  Merger (fusie) with or split-up (splitsing) into other legal entities;
•  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, 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 for review of the shareholders from the day the meeting is called to approve the financial statement.

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 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.

Financial year
The financial year of a V.B.A. is the calendar year, unless otherwise stipulated in its articles of association or Regulations.

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 if applicable the supervisory directors. 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. 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 V.B.A. are at the disposal of the shareholders and other persons entitled to profit sharing (if any). In the articles of association or Regulation it can be determined that upon adopting the financial statements the shareholders or another corporate body should decide whether to declare a dividend or to reserve the profits. The shareholders or another corporate body appointed to do so in the articles of association or Regulations may decide to declare interim dividends from current year profits or from profits stated in a financial statement which has not yet been adopted. 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.