WHO DETERMINES THE POLICY OF A DUTCH CARIBBEAN COMPANY?

The management board is in charge

The shareholders have the authority to determine the general policy of a Dutch Caribbean NV or BV.

The shareholders may give instructions to the management board with respect to the general direction of the financial, social, economic and personnel policies of the corporation.

However, the shareholders cannot give detailed instructions to the management board unless (in the general view of legal practitioners, myself included) the articles of association so permit. Although not explicitly provided for in Book 2 of the Dutch Caribbean Civil Code (CC), it is considered a general rule of corporate law that the management board must act in the best interests of the NV or BV in the performance of its duties, even when acting upon instructions from others (e.g. shareholders).

The shareholders of a Dutch Caribbean NV or BV do not wield supreme authority in the company. The management board is not hierarchically subordinate to the shareholders. Generally, the shareholders have a very limited role in the management and operations of the company. The shareholders cannot operate as the executives of the corporation (which is the exclusive power of the management board).

A shareholder (or supervisory director) who is not part of the management board yet for a specific period or under certain circumstances, whether or not pursuant to a provision either in the articles of association or in Book 2 of the Dutch Caribbean Civil Code, determines or co-determines the policy of the corporation as if he were a managing director, shall with regard to such conduct, insofar as his obligations as regards the corporation and third parties are concerned, be considered a managing director (Article 2:138/238 CC). Such a policy-maker (”de facto managing director” or “quasi managing director“) also falls within the scope of the provisions on directors’ liability (Articles 2:14 and 2:16 par. 9 CC) and may be held liable on the same grounds as a managing director.

Karel Frielink
Attorney (Lawyer) / Partner

3 May 2011

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