Notary Hilde Rodriguez-Taekema has been a notary in Aruba since 2001. During this interview she explained to the Chamber News & Views the duties of a notary and provided some tips for entrepreneurs.
Tell us a little bit about yourself?
Notary Hilde Rodriguez-Taekema (HRT): I studied in Groningen, The Netherlands, notarial law. Afterwards I worked ten years in Utrecht as a notary candidate before meeting my future Aruban husband and moving to Aruba. Then I worked another almost eight years as a notary candidate- before being appointed notary by the government of Aruba in 2001.
When I was appointed as notary, I did not succeed anyone. As Aruba was growing economically, the government decided to use the maximum quantity of notaries determined by the law and opened a fourth position for a notary. And so I started my office with a blank sheet, because I did not inherit anything from anyone. When I first started in the Bilderdijkstraat, I had four employees, and today I employ 14 people. In 2007 I had a new building constructed,and have been established there ever since.
What does a notary do?
HRT: After completing law school, a notary still has to complete a notarial graduate program, and afterwards work as a notarycandidate at a notary office. In The Netherlands, the number of years a notary-candidate has to work under guidance before he/she can act as a notary is determined by law, but in Aruba this is not the case.
In general, in our occupational group, we are working towards more modernized legislation regarding the notary’s profession, because the existing one is pretty outdated.
A notary candidate becomes a notary when appointed by the government of Aruba. The Aruban legislation mentions four notaries, and up to 2001, there were only three. Because of the economic prosperity and growth, the government saw it fit to appoint a fourth notary, where I was selected. This meant that notaries could do more specialization in particular areas, and citizens now have a wider choice, who to select as their notary.
Our profession is all about economic prosperity. When the economy is good, and people have jobs and good wages, they can afford houses, establish businesses, etc. The office of the notary is really dependent on these factors, because by law, a notary cannot promote his services. And that is always a challenge. We make ourselves known by giving lectures, being board members in certain organizations, etc. Of course, providing the best service possible to have satisfied customers spread the word about one’s office is always best.
Are four notaries on the island enough?
HRT: People, including the government, tend to think that the notary services take too much time. In most of the cases, the time needed to deliver deeds and other documents depend on information from third parties to complete the documentation in a decent period of time. Third parties are the department of infastructure and planning, cadastre, tax office, etc. Documents that could have been ready in 2 weeks, unfortunately, are delivered in 3 to 4 months.
In the case of business establishment, the High Commissioner has up to a month to provide the notary with the declaration of no objection. This can take longer than the stipulated deadline in exceptional cases, when additional information is required from the incorporators. But regular cases take no longer than a month.
To answer your question, I would say four notaries are enough for our island, when everything works as it should. With economic growth comes more transactions, and then I would say there will be a need for more notaries, but the flow of information must be available as well.
In your opinion, it is best that business owners should have a will?
HRT: There is no difference between inheriting a house or a business. Both are assets. When a business owner dies, his assets, including the business, are inherited by his heirs. When there are two or more people involved, they may choose to run the business, or if they have no interest, they can sell or close it. If it is just one heir who has the affinity of running the business, they might arrange the acquisition amongst themselves. It is all up to the heirs, in such a case.
When it concerns the shares of a company, and the heirs choose to continue the business, they will have to appoint a new managing director. Most new corporations include a clause in the deed that the General Meeting of Shareholders should annually appoint an interim manager in case something unexpected happens. They can appoint a third party to act as the interim manager until the new shareholders have an appointed a new managing director. This can be a trusted person, the accountant, or any employee(s).
Including an interim manager in the deed is not defined by law, but nonetheless it is a good suggestion, even the High Commissioner recommends it. The reason is that inheritances can take a long time and the business cannot stay without a managing director for too long, as it needs continuity.
Entrepreneurs, who are shareholders and managing directors in their businesses, do wisely to make up a will. After a person has passed, his/her heirs will need a certificate of inheritance to claim what is rightfully theirs.
The certificate of inheritance is drawn up by the notary, but to complete this certificate, the notary needs to know if there is a will, and all that it entails. This information is available at the Central Testaments’ Register through a declaration. This Register is held in Curaçao for all six Dutch islands. A notary, from any of the six islands, making wills will automatically send a notification to the Central Testaments’ Register on a monthly base.
When somebody dies, the Central Testaments’ Register has the information, whether the deceased had a will and where it is, but not what it contains. There were some difficulties obtaining information from the Testaments’ Register in Curacao, especially for notary offices established outside of Curacao. We have recently solved this problem on our open cases, which were 200 petitions, through collaboration with one of our notary colleagues in Curacao. When you see how many cases remain open due to the lack of a will or cases that are handled incorrectly because the heirs did not have access to correct information whether or not there was a will, you realize how crucial it is to have reliable information available.
What can entrepreneurs do to avoid such situations?
HRT: The inheritance of a business is no different than the inheritance of a house. The main difference is that, compared to the house, where you just live in it, the business requires more work and effort. Through a will a business owner can arrange to leave his business to his child (heir) who has the ability and/or interest to run the business. The others, who have no affinity with the business, can get other property or they will receive their part in pay.
Often, we see in partnership agreements that the business partners agree that in case one of them should pass away, the other partner will keep the business. In some cases, the remaining partner will have to pay off the heir(s) of the deceased his part but most of the time, it has already been arranged. Sometimes, it may be wise to have an insurance that covers the costs of paying off heirs their share in the business.
Is it necessary to have agreements notarized in case of business partnerships?
HRT: Not necessarily. But the advantage of having an agreement notarized is that the date and signatures are verified. The identity of everyone present is established. A notarial deed is full evidence; there is no more proof than that.
Another option is to make a private contract and when you sign the contract, you legalize the signatures through a notary. The notarization means that it is the signature of that person, signed on such date. It basically means, the parties signed a contract in front of the notary and then the notary makes a statement of what has taken place.
Can I protect my personal property, by separating it from the business?
HRT: Yes. For example, a business owner has three children and only one shows interest in continuing the business. The business owner can therefore choose to leave the business to this particular child and the others get other property, such as a house or bank accounts. In case, one heir inherits more than the others, he might have to pay the others for compensation.
Can the liability of the managing director be limited in the deed in order to protect him?
HRT: The liabilities of the managing director are not clearly defined in the deed of incorporation. The deed is more about the rights and obligations of the shareholders, rather than the managing directors’. The risk of the shareholder is the share he has invested in the company. Let’s assume the managing director is a different person than the shareholder. In this case, the managing director should not be personally liable for the actions and debt of the corporation.
However, the managing director has liabilities when it comes to debts of the company owed to the government. He decides when and how the business will pay for its taxes and mandatory premiums, such as pensions and health care. When he decides not to pay or to postpone, he will be held accountable, because he represents the corporation.
For instance, someone was the managing director of a corporation a few years back but is not anymore. And letus suppose this person wants to sell his house and he found a buyer. To complete the deed of purchase the notary will need information from the tax office, declaring that this person doesn’t have any outstanding dues or taxes with the government. If the company where he used be the managing director owes taxes and should it be that these taxes are still due from the period he was the managing director, then it will be really difficult to sell his house without paying the taxes first. Even if the debt is not from when he was the managing director, the tax office can make it very difficult to clear this person before the company’s outstanding taxes are accounted for.
Even worse are cases, when someone decides to act as a managing director in a company, as a favor because the actual managing director does not comply with the requirements for the managing director’s license. It is important to point out you cannot separate your personal properties from business liabilities through a deed or contract. It is unfortunate when someone is held liable for actions he did not take but is accountable because he is the registered managing director.
One of the things entrepreneurs can do to protect the properties of their spouse, is to make a prenuptial agreement before they get married. Few people do this but I would recommend anyone to think about this option with their future spouse before getting married, when they are thinking ahead of possible future plans, maybe opening a business or other investments, or taking a certain career. Make an appointment with the notary to learn more about the possibilities and then decide whether having a prenuptial agreement is best before tying the knot.
What advise can you give entrepreneurs who want to incorporate a new business, or go from a personal liability business to incorporation?
HRT: I have always thought an entrepreneurial program. The Chamber has organized one in the past and I think it is essential to continue with such a program.
It is important for starters to know that having a business starts with knowing how to keep a good administration. I see many people, even those with a good education, fail because they lack administration skills. Hire an accountant if you do not know the basics or do not have the time to keep your administration. Make sure your administration is always up-to-date. You may have the best business ideas, but with poor administration, it will be a matter of time before problems arise. Starting entrepreneurs must know what they are doing and in doing so, protect themselves from possible troubles, because tax debt does not disappear and the consequences can be very serious. (The Chamber just started a new entrepreneurship course in October 2014, Red.)
I also think working part-time should be stimulated on the island, it has been proven that working part-time motivates employees, creating more productive employees.
Is there anything else you would like to add?
HRT: Not really. If there are entrepreneurs looking for more information regarding the law of succession, it is best they make an appointment with the notary. As each personal situation is unique, during a consultation the notary will provide you a personal assessment, and then you will really know what suits you best.