The new Belgian Company and Association Code has finally been adopted!
After a long parliamentary path and several amendments, the new Companies and Associations Code (hereinafter the “CAC”) has been approved by the Parliament on February, 28th 2019. The CAC contains important changes in the Belgian corporate landscape which will inevitably affect your (existing) start-up or scale-up or change the way you would want to constitute your company.
Aside from the numerous forms of companies that have been repealed by the CAC – including the ‘Starters’ Limited (S‑BVBA/SPRL‑S) – the regime of the Limited liability company (BVBA/SPRL, now called “BV” and “SRL”) is the most affected by the new law. The aim was to render the Limited liability company as flexible as possible and easily adaptable to the intentions of the founders or shareholders.
Among other things, Limited liability companies will
- have no more capital requirement. The capital requirement is however replaced by the obligation to hold sufficient initial equity. The founders have the obligation to ensure that the company has, at the time of incorporation, sufficient equity to carry out the intended activity;
- no longer be forced to observe the “1 share = 1 vote” principle. As a consequence, the Articles of association will freely determine the extent of the (voting) rights in relation to one’s shares;
- be able to freely transfer their shares, unless specified otherwise by the Articles of association.
Broadly speaking, the new Limited liability company has been provided with a flexible framework in the sense that many of the mandatory legal rules make room for more discretion by the founders, shareholders and directors of the company. Hence, the founders or the shareholders can opt for the ‘default rules’ provided in the CAC or formulate their own rules in the Articles of association.
The public limited company (NV/SA) has also been remodelled, but not as much as the Limited liability company. Among other things, the CAC introduces a new managerial structure for all public limited companies as well as the possibility to implement a double voting right system (i.e. the so called “loyalty voting rights”) for the listed companies and a multiple voting right system (similar to the Limited liability company’s system’) for non‑listed companies.
The entry into force of the CAC is set at May, 1st 2019. All existing companies have to be compliant with the CAC by January, 1st 2020 at the latest, but you can choose to adopt the CAC before the aforementioned date.
In concrete terms, from the entry into force on, and depending on the type of company you own, the new mandatory rules will be applicable to your company. The new mandatory rules contain, amongst others:
- the exclusion of employment contracts for directors;
- the broadened definition of executive management (dagelijks bestuur/gestion journalière);
- the rules on distribution of profits in the Limited liability companies;
- new rules concerning directors’ liability and
- the issuance of new securities.
As for the Articles of association of your company, you will be obliged to adapt them as from the first amendment of the Articles of association following January, 1st 2020 (and in any case, before January, 1st, 2024).
This can all seem far in time, but it seems appropriate to rethink your company structure right now.
If you need advice on or help conforming your company to the new legislation or if you would like more information about the implications of the new legislation, contact us at:
Patrick DE WOLF / firstname.lastname@example.org | Laetitia DE SMET / email@example.com | Samantha KABEYA / firstname.lastname@example.org