Corporate Law
Next to an individual, in law called "natural person", the law recognizes "legal entities". Some of the most used legal entities are discussed hereinafter.
In order to do business on Sint Maarten, and also in order to obtain necessary permits, such as work-permit and business-license, people can make use of the folowing organisation types;
A limited liability company (LLC) is a legal entity similar to the French Societe Anonime and the German Aktien-Gesellschaft. The LLC is incorporated by notarial deed exclusively, and the document among other things establishes the following:
Name and island of establishment
The purpose(s) of the company
Amount of authorized and issued capital
The manner in which shares are issued and the manner in which shares can be transferred
By whom the company is represented in and out of court
Certain limitations for management, meaning that certain decisions may require prior approval of the general meeting of shareholders
Regulations regarding voting in certain situations
The identity of the first directors of the company
The identity of the first shareholders-incorporators of the LLC
Prior to the execution of the deed of incorporation it is essential by law that a declaration of "nil obstet" is obtained from the Ministry of Justice of the Netherlands Antilles. This ministry is located in Fort Amsterdam in Willemstad, Curacao. This declaration signifies that the articles of incorporation have been checked by the legal department of the ministry and that there are no objections to the incorporation of the company.
Thereafter the notarial deed of incorporation can be executed, a share-holders register will be issued and the necessary licenses will be requested. Also the company will have to be registered with the Chamber of Commerce on Sint Maarten. Our office will take care of all the necessary paper-work, however will not follow up on license-requests. Also after incorporation our office will take care of the publication of the company in the official gazette "De Curacaosche Courant", which is the official organ of the state.
In this context it is very important to note that the issued share capital after incorporation will have to be paid up in full. Lest this is not done the limited liability of the shareholders-incorporators will not take effect and the incorporators will remain personally liable for the total debts of the company.
Also mention has to be made of the limitations which the Island Territory of Sint Maarten sets in respect of the purpose that a company has, especially in respect to companies incorporated by non-Antillians. It will always be advisable to check the purpose of a company with the Department of Economic Affairs of the Island Territory. This obviously also applies to companies on the other islands.
As to the limited liability aspect referred to before goes, that provided that all legal requirements have been fulfilled, namely:
The obtaining of a declaration of "nil obstet"
The incorporation of the company by notarial deed
The registration of the company with the Chamber of Commerce
The payment of the issued capital in full
The publication of the company in the official gazette
the incorporators and any further shareholders thereafter are free from any liability towards the debts incurred by the company, provided these debts were incurred in a legal manner. If any of the legal requirements are not met the limited liability is not in effect.
As already stated our company takes care of the necessary paper-work regarding the incorporation, but also thereafter facilitates all other corporate work, such as: share-transfers, changes in the articles of incorporation (which require that the same legal requirements as stated before are met), changes in the management of the company, etcetera.
All the abovementioned is valid for on-shore (companies doing business within the Dutch Caribbean) as well as for an off-shore (companies doing business entirely outside the Dutch Caribbean) except that for offshore corporation a business license will be automatically provided.
The local authorities levy annual license fees for corporations, which for a company with two directors can amount of appr. US$ 1,400.00 per year. Further details can be provided upon request. The same goes for the fees applicable to the incorporation of the company and other work performed.
For further information contact Mrs. Zephanie Fleming-Lejuez of our corporate department.
A foundation is a legal entity which is incorporated to achieve a certain purpose, such as for instance the promotion of sport, or cultural interests, etcetera. The main character of a foundation is that it is a non-profit organization, in which the highest authority is resting with the board. The board will normally consist of an odd number of members, with a minimum of three. From this board an executive board is nominated, consisting of a President, Secretary and Treasurer. The foundation is normally represented by the President and one other board-member.
For the foundation goes again that is has to be incorporated by notarial deed and has to be registered with the Chamber of Commerce. However no other legal requirements are necessary to be fulfilled.
The notarial deed will show the following:
Identity of the persons establishing the foundation
The setting aside of a nominal capital, mostly an amount of one hundred Antillian guilders
The name of the foundation and the island of establishment
The purposes of the foundation
The institution of a board and the regulations of the authority of the executive board
Who is eligible to be a board-member, how a board-member is appointed and how he is dismissed
Manners in which the foundation intends to obtain funds
Regulation in respect of board meetings and the manner in which decisions are made
Regulations in respect of the liquidation of the foundation
The identity of the first members of the board and the executive board
It goes without saying that the foundation is by far the easiest legal entity to establish. On Sint Maarten it is widely used for sports-organization, charitable causes, schools, etcetera.
Often it is essential that a group of persons with a common goal is together in a foundation in order to obtain government subsidies.
The association is a legal entity which has many similarities with the foundation. However the legal requirements for establishing an association are quite different from the foundation.
First of all since the highest authority within the association rests with its members and not with its board. The first step is a meeting in which prospective members decide to form an association. In that same meeting draft articles of incorporation have to be approved and the first board has to be appointed. From all this minutes will have to be made. The minutes will have to be signed by the President and Secretary of the proposed board, and the draft articles of incorporation will have to be signed by all future members present at the meeting.
After this the minutes of the meeting plus the signed draft of the articles of incorporation together with a request for approval of these documents are forwarded to the Governor-General of the Dutch Caribbean, who has his seat in Willemstad, Curacao. The draft articles of incorporation will be vetted by the Cabinet of the Governor, and if there are no objections towards its incorporation, the Governor will give permission for the association to be established. Thereafter the articles of incorporation (or constitution) of the association can be laid down in a notarial deed, however this is not a legal requirement. The association will have to be registered with the Chamber of Commerce. Also the articles of incorporation will have to be published in its entirety in the official gazette, De Curacaosche Courant.
The articles of incorporation will include all elements as mentioned for the foundation but also contain conditions in respect of the eligibility of persons to become a member of the association and how the member-ship ends.
The association is not so widely used, due to its complexity of procedures as compared to the foundation. It is however essential for such bodies as political parties, in which it essential that the highest authority rests with the membership on the basis of democracy.
Further information about foundations and associations can be obtained from any of the partners of our company.