Draft law change to give right of enquiry to interested third parties

February 10, 2012 6:40 AM

PHILIPSBURG--It already exists in the Civil Code that interested third parties can petition the court to see the books of a foundation.

Now a pending amendment to the Civil Code Book II seeks to extend that right of third parties to cover corporations, limited liability companies and other similar legal entities.
 
The draft amendment was discussed by Members of Parliament (MPs) and Notaries Association representatives in a Central Committee hearing on Thursday.
 
Association President Henry Parisius told MPs that a third party would have to petition the court for the right to look into the books of a private or public foundation and, once the law had been passed, into those of a corporation or company. Grounds for such an enquiry must constitute serious doubt about the running of the organisation or that there had been contravention of the law.
 
It would be up to the court to appoint, in the case of finance, an accountant to review the situation for the third party.
 
MP Leroy de Weever (Democratic Party) was sceptical about the amendment not strictly defining who a third party could be, and asked for further deliberations with the notaries to come up with such a solution. That solution, when arrived at, will be inserted into the pending amendment before it is sent to a Central Committee meeting for review and forwarding to a plenary session of Parliament for approval.
 
"We can't sit and wait for interpretation. We need it in plain language ... absolute proper wording, or there is a potential for problems," De Weever said, warning fellow politicians to be aware that their "political action committees," which often take the form of foundations, could be delved into by third parties.
 
The Civil Code Book II was amended in 2004 to introduce the third party enquiry right for foundations. That right also extends to government if it gives a subsidy to the group in question, as it would once the new changes are adopted.
 
The change in 2004 had put the former Netherlands Antilles ahead of The Netherlands in terms of transparency legislation. The Netherlands has since caught up.
 
The 2004 changes to the Book II were reviewed by an evaluation committee and it is from their work that the pending changes have come about. The committee was tasked with reviewing the real-life application of the laws to see where improvements could be made. The application of similar changes in The Netherlands also led to the pending changes.
 
Notary Candidate Lars de Vries explained another draft change to Book II that deals with allowing the creation of special shareholders arrangements, such as one to give the rights to buy shares first when they become available. Under the present legislation, such a clause has to be part of the articles of incorporation for this to be allowed.
 
Another pending change to Book II will affect the coffers of government. As it stands, all incorporation of companies must be published in the National Gazette that is regulated and published by government. Under the pending changes, this publication would no longer be needed.

(Source: The Daily Herald)

10 February 2012