November, 2019 – Belgium – Van Marcke Advocaten
The importance of a competitive company law is clear. The Belgian legislator has finally taken an important step to make the chaotic legislation around Belgian company law more efficient, more modern and more competitive. The most important changes in the new law are as follows.
In order to simplify things, under the new law there will only be four main types of company left, namely the private company (‘BV’), the joint-stock company (‘NV’), the cooperative company (‘CV’) and the partnership (‘maatschap’). Previously there were no less than 17 different types of companies.
Following the jurisprudence of the CJEU on freedom of establishment, Belgium will now also follow the registered office doctrine. This means that only the location of the seat, as determined in the articles of association, will determine the applicable company law. This makes it a lot easier when you want to apply Belgian Law to your company or want to avoid its applicability.
Certain provisions, which were previously limited to companies, will now also be applicable to associations. The distinction between the two was based on whether they were a profit or non-profit entity. The distinction is now irrelevant as associations are allowed to seek to make a profit, as long as they do not violate the absolute prohibition on distribution of any type of profits.
The limitation of liability becomes a possibility for directors. The thresholds are determined by the turnover and balance sheet total of the company in question.
A specific procedure for transboundary movement of the company is provided by the new legislation (Articles 14:15 et seq. WVV).
Concerning the BV, several big changes were implemented as well. They all impact the flexibility and accessibility of the corporate form.
One legal person instead of two will now suffice to establish a BV, neither are you required to inject a certain amount of capital into the company. On top of that, there’s now a possibility to freely transfer shares, as well as a possibility to assign multiple voting rights to certain shares.
Concerning the NV, the biggest changes were the following: you will get the choice between three different forms of governance of the company, the ad nutum revocability will be abolished and multiple voting rights are made possible (with some limitations for a publicly traded NV).
For existing companies, reasonable transition periods are provided to avoid rushed statutory changes. The new law applies to all new companies established from 1 may 2019. Mandatory rules will also be automatically applicable to all other companies from 1 January 2020 onwards, while those companies will automatically be transposed in one of the remaining company forms on 1 January 2024. In the meantime those companies will be free to voluntarily turn into one of the new company forms by amending their articles of association (opt-in system). From 1 January 2024, all remaining companies will have six months (until 1 June 2024) to adapt their articles of associations to their new company form.
If you need further info please contact Van Marcke Lawyers, Jelle Lammertyn, email@example.com