As you certainly know, since January 1, 2020, in the event of a change in the company’s bylaws, the bylaws will have to comply with the provisions of the new Belgian companies law.
The company’s articles of incorporation will have to be brought into line with the new Belgian Code on Companies and Associations (hereinafter referred to as “BCCA”) by December 31st, 2023 at the latest, otherwise the companies concerned will be transformed by law.
We strongly recommend that you adapt your company statutes between January 1, 2020 and December 31, 2023, in order to benefit from the flexibility offered by the new companies law. Those changes should preferably be operated during the year 2020, so as not to be in contradiction with the mandatory provisions of the BCCA for a too long period.
The following mandatory provisions apply as from January 1, 2020, even if no amendment to the statutes has been made.
The terminology of the different company types and some other concepts have already been amended according to the new provisions:
|Old terminology / abbreviation||New terminology / abbreviation|
|BVBA/SPRL - private limited liability company||BV/SRL - limited liability company|
|GCV/SCS - ordinary limited partnership||CommV/SComm - limited partnership|
|CVBA/SCRL - co-operative company with limited liability||CV/SC - co-operative company|
|VOF/SNC - general partnership||VOF/SNC - general partnership|
Furthermore, the term “manager” is replaced by “director” in all existing company forms. The term “shareholder” is now used instead of “partner” in BV/SRL (limited liability company) and CV/SC (co-operative company). However the term “partner” is still used in the simple companies, VOF/SNC (general partnership) and CommV/SComm (limited partnership).
As these provisions are mandatory, the company can already use the new terminology, even if its articles of association have not been amended yet. It is therefore allowed to already use the new company designations on letterhead or similar documents..
One of the flagship amendments of the Belgian reform is the removal of the minimum share capital for these company forms. This has various consequences: (i) the released portion of the share capital and (ii) the statutory reserve of existing BVBA/SPRL and CVBA/SCRL will be automatically converted, as per January 1, 2020, in statutory unavailable equity. The unreleased portion of capital, in both company forms, will be converted in an equity account called “uncalled contributions”.
As the concept of capital has disappeared, the calculation for the distribution of the result and for the alarm bell procedure have changed too. From now on, these two procedures will be subject to a new two-tier test, i.e. a double distribution test: a net asset test and a liquidity test. The company can distribute, on the occasion of an amendment to the articles of association, both the capital as the legal reserve, as long as it complies with the two-tier test.
In the BV/SRL (limited liability company) as well as in the CV/SC (co-operative company) or the NV/SA (public limited company), it is clearly written in the new Belgian CCA, that the Directors, as such, can not work under an employment contract in the company. So Directors are obliged to be self-employed in order to exercise their mandate and they need to register with a social security fund (potentially as a complementary self-employed person).
Exception : if the directorship is not remunerated (which must be brought out by the decisions of the General Meeting and/or publications in the Belgian Official Gazette), the registration with a social security fund is not necessary..
The obligations related to dealing with conflicts of interest (drafting and publication) have been fundamentally amended. The appointment of an ‘ad hoc’ representative is no longer applicable.
The rules below apply to BV/SRL (limited liability company), to CV/SC (co-operative company) and NV/SA (public limited company) with a one-tier system (= management board) or a sole directorship
• If the soledirector is also the sole shareholder, he can take the decision or execute the operation himself.
• If a director is conflicted, the other director(s) can take the decision. The conflicted director can’t participate in the vote. The same procedure applies if the director is active in a college of directors. In that case, the director can’t participate in the vote either.
• If all directors are conflicted, the decision or operation is subject to approval of the shareholders’ meeting.
In any case, a special director’s report will have to be drawn up (and if necessary, also a report of the general meeting) which will have to be filed at the same time as the annual accounts.
For two-tier systems (with two corporate bodies, namely a supervisory board (raad van toezicht / conseil de surveillance) and an executive board (directieraad / conseil de direction)), the article 7:115 of the new BCCA applies but since this is not a frequent situation, we will not develop this topic here.
Since January 1, 2020, the amounts up to which Directors’ liability can be engaged, are capped. This will facilitate the conclusion of insurance contracts covering directors’ liability since the risk can be clearly confined. The table below summarizes the maximum amounts depending on the company’s turnover and balance sheet total.
|MAXIMUM AMOUNT LIMITATION DIRECTORS’ LIABILITY||Turnover (VAT excl.) (*)||BALANCE SHEET TOTAL (*)|
|125,000 EUR||< 350,000 EUR||AND||< 175,000 EUR|
|250,000 EUR||From 350,000 EUR to 700,000 EUR||AND||From 175,000 EUR to 350,000 EUR|
|1,000,000 EUR||From 700,000 EUR to 9,000,000 EUR||OR||From 350,000 EUR to 4,500,000|
|3,000,000 EUR||From 9,000,000 EUR to 50,000,000 EUR||OR||From 4,500,000 EUR to 43,000,000 EUR|
|12,000,000 EUR||> 50,000,000 EUR||OR||> 43,000,000 EUR|
(*) turnover and balance sheet total to be calculated on the basis of the average of the last 3 financial years
Important note! These limitations do not apply in the following situations:
• minor misconduct of a recurrent nature (not accidental) or serious misconduct;
• fraudulent or malicious intent;
• particular liability in the event of a social or tax-related debt;
• new liability: continuing a loss-making activity.
The new BCCA formally prohibits in article 2:55 that a natural person takes part in decisions in his own name and at the same time as the representative of a legal person. It is thus no longer possible to exercise a double mandate in all forms of companies.
This list of mandatory provisions coming into force on January 1st, 2020, is not exhaustive but the different elements listed are essential for most of the companies, which is why we have explained them briefly.
In support of your usual FIDUCIAL Accountancy advisor and file manager, our legal advisors from Fiducial Tax & Legal Consulting can assist you with all these changes (bylaws) and are available for any other information relating to the new BCCA-provisions, in order to prepare your business for the future.
Please do not hesitate to ask for a non-binding offer.
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