The mandatory provisions of the code have applied since 1 January 2020, but there is still some confusion among companies incorporated in Belgium.
Name of jurisdiction
The Companies and Associations Code, which now applies to all
companies incorporated in Belgium, regardless of their location or
centre of main activity.
What's the reason for the change?
The new code extensively rewrites the rules regulating companies, associations, and foundations in Belgium. It's more structured but also provides for more flexibility. One of the goals of the code is to modernise the Belgian corporate landscape and make it more competitive and attractive for investors.
What's does it mean for business?
The code impacts companies in Belgium in the following ways:
- Company types: the number of company categories is reduced from 17 to 7. The company type impacted the most by this reform is the private limited liability company (BVBA/SPRL) which is now a limited liability company (BV/SRL).
- Terminology: the terminology has been updated, for example registered office is now referred to as seat, the registered capital is now referred to as capital and in a BV/SRL, the managers (gérant/zaakvoerder) are now called directors (administrateur in French and bestuurder in Dutch) and shareholders (associé/vennoot) are now known as actionnaire in French and aandeelhouder in Dutch.
- Capital: the concept of 'capital' no longer applies to a BV/SRL nor does the requirement for a minimum amount of capital at the time of incorporation. On 1 January 2020 the existing capital and legal reserves in a company were converted into a "statutory unavailable equity account." This changes all the procedures in relation to the capital for a BV/SRL (capital increase/reduction, dividend, remuneration of contributions (shares, voting rights, earnings per share and so on). In order to convert the "statutory unavailable equity account" into an "available equity account" an amendment to the articles of association (AoA) is required (i.e. via a notarial deed).
- AoA: any updates to your company's AoA must adhere to the new Code provisions. All AoA must be harmonised with the new Code by 1 January 2024 at the latest.
- Real seat theory: this is abandoned in favour of the incorporation theory.
- Cap on damages: this relates to director liability and the size of the company.
Other changes include amendments to companies' managing bodies, the introduction of multiple voting shares and a new legal regime for non-profit associations. You can read the new code in full, in Dutch or in French.
What should you do now?
Any corporate document listing the type of legal entity must be updated to comply with the new requirements.
How we can help
TMF Belgium's corporate secretarial experts can help companies get up to speed with all of the new code requirements, assist with accounts approval and filing and shareholders register amendments.
Our team can also check your company's compliance with Belgium's Ultimate Beneficial Owner (UBO) register and submit any outstanding registrations.
Need more information? Contact us today.
Originally published 07 May 2020 .
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.