International Law

MANAGEMENT AND SUPERVISION OF THE ARUBA COMPANY WITH LIMITED LIABILITY

By Karel.Frielink

A local representative is required

On January 1, 2009 the new Aruba Ordinance on the company with limited liability (vennootschap met beperkte aansprakelijkheid; VBA) became effective.

Except for restrictions in the articles of association, the Board of Directors is responsible for the management of the VBA and is authorized to represent it. The Board may consist of natural persons and/or legal entities. A VBA must have as local representative, an Aruban corporation (NV or AVV) of which its bylaws and business license explicitly provide for the representation of companies, unless the VBA either has one or more directors with their residence within Aruba, or one of more companies as director, of which companies one or more directors have their residence within Aruba.

The Board of the VBA can be organized as one-tier board or as two-tier board. In the first case (the Anglo-Saxon system) there is a Board of Directors, of which a minority may be charged with the day-to-day affairs. The latter members together may be called the Executive Board, which is responsible for managing the VBA, and also for the representation of the VBA, with the exception of the restrictions in the articles of association. The two-tier management structure is the traditional system in the Netherlands, the Netherlands Antilles and Aruba, in which case supervision of the Board is conducted by a Supervisory Board.

Restrictions under the articles of association and statutory restrictions of the representative authority can be invoked against third parties, the so-called external effect. In the so-called ?guideline system? in EU directives, which has been implemented in the Netherlands, such external effect has been assigned to only a few specified restrictions of the representative authority.

Karel Frielink
Attorney (Lawyer) / Partner

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Full post as published by Karel's Legal Blog on April 14, 2009 (boomark / email).