The new Belgian Code on Companies and Associations came into effect May 1, 2019. The Belgian Code on Companies and Associations (the “BCCA”) repeals the existing Belgian Companies Code (the “Current BCC”) and is aimed at modernising and simplifying company law.
The BCCA allows more flexibility to Belgian companies, but also require them to amend their articles of association.
The Key Updates
Types of companies
With the number of the categories of companies narrowing down from 17 to 7, the private limited liability company is most affected by this change. Private Limited Liability Company or BVBA/SPRL has now become a Limited Liability Company also known as BV/SRL.
The phrasing has also changed, for instance, a registered office is denoted as a seat and registered capital is denoted as capital. Similarly, managers or gérant/zaakvoerder in a BV/SRL are referred to as directors or bestuurder in Dutch and administrateur in French. The shareholders or associé/vennoot are referred to as aandeelhouder in Dutch and actionnaire in French.
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. The existing capital and legal reserves in a company were converted into a “statutory unavailable equity account” as of January 1 2020.
This code has brought a change to all the processes that involved the finances of a BV/SRL, such as the capital increment and reduction, compensation of contributions like the earnings per share, shares and voting rights, and also the dividend. To modify the statutory unattainable equity account into an attainable equity account, an update to the articles of association, also known as an AoA, is mandatory through a notarial act.
Furthermore, any upgrade to a new company’s AoA needs to abide by the new code. That being said, all AoA has to be in sync with the new code latest by January 1, 2024.
Real Seat Theory
The Belgian Centre for Corporate Law (BCCL) has adopted the incorporation theory over the real seat theory.
Cap on Damages
This is relating to company directors. It also depends upon the size of the company.
Other changes include a new legal regime for non-profit association and amendments to companies’ managing bodies.
The code has brought in changes that has impacted how companies should construct the yearly accounts and yearly approval documents. It is of utmost importance to note that the 2019 accounts will be enlisted under the previous code and the approval documents need to comply with the new rules mentioned in the code.
Companies will also need to update all corporate documents listing the type of their Belgium legal entity to comply with the new requirements.
Please get in touch with us for more information about this development or for support with you Belgium operations.