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International Law

: Karel's Legal Blog

DEMERGERS IN THE DUTCH CARIBBEAN

By Karel.Frielink

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Transfer of business or legal split-off

A split-off can take place by transferring part of the business of a company to its shareholders by way of a dividend in kind. In the event the split-off concerns a subsidiary, the payment in kind would be in the form of shares in such subsidiary. Instead of a dividend in kind, the transfer could take place upon a capital reduction or repurchase of shares. The consideration for the reduction or repurchase would then be satisfied in kind.

In the event of a legal demerger or division (a.k.a. legal splitting or legal split-off) a company either ceases to exist and will be acquired by two or more other companies (absolute division) or it will not cease to exist, but its business or part thereof will be acquired by one or more other companies (partial division). In the event of a partial division, either the company to be divided must establish a new company, or, at least one of the acquiring companies must issue shares to the shareholders of the company to be divided (Article 2:335 par. 2 Netherlands Antilles Civil Code).

Karel Frielink
Attorney (Lawyer) / Partner

Full post as published by Karel's Legal Blog on March 21, 2008 (boomark / email).