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The new Belgian Companies and Associations Code : How will the reform impact your company?

  • Belgium
  • Corporate


Why a major reform?

  • Simplification
  • Flexibility
  • European developments

I.   In general

Statutory seat

  • Both Belgian and non-Belgian companies will be governed by the company law of their statutory seats. This means you are in control of the law applicable to your company. Board meetings can now be held in London, Michigan, New York or Washington without running the risk that the company will be considered to be governed by the corporate law of the country from which it is effectively being run!
  • However, for the purposes of corporate income tax and insolvency law, the effective management or center of main interests will remain the criterion.
  • The Articles of Association must mention the Region where the statutory seat is situated (the Bilingual Region of Brussels-Capital, Flanders or Wallonia). Optionally, they can mention the address where the corporate seat is located, in which case any change of address will result in a modification of the articles of association. The governing body of a company can move the seat without having to modify the article of associations, provided that such a move does not affect the official language of the company

Director’s liability

Director’s liability is subject to several changes. E.g. liable persons, a cap on liability, prohibition of ‘hold-harmless’ clauses, the scope of liability.

  • Formally appointed directors and persons who, without having been appointed as directors, are managing or have effectively managed the company e.g. through their influence can be held liable towards the company and possibly towards third parties.
  • Directors or de facto directors who were not involved in the decision leading to their liability can escape the collective liability if they denounce the contested decision to the other directors. This notification must be included in the minutes.
  • A maximum liability is introduced for faults that do not constitute minor misconduct of a usual rather than accidental nature, serious misconduct, fraudulent intent or intent to cause harm. The cap does not apply when shares have not been validly subscribed. The cap on liability ranges between 125 000 EUR and 12 000 000 EUR depending on the size of the company.
  • As a counterpart to the above, exoneration and ‘hold-harmless’ clauses are prohibited.

Daily Management

The concept of daily management is defined and broadened to include: (i) day-to-day decisions; (ii) decisions of minor importance; or (iii) urgent matters that do not justify the intervention of the board of directors. It is also extended to the SRL/BV.

Conflict of interest procedure

The procedure relating to conflict of interests has been clarified, despite of becoming stricter. How will your directors be impacted?

  • Directors with a(n) (in)direct economic interest can no longer participate in the decision-making process.
  • When the conflict of interest is generalized to the entire body, in the monist system of governance (one director or a single body), the decision is deferred to the general meeting and in a dual system of governance (supervisory board and governing council), it is deferred to the supervisory board.

Permanent representative

  • A legal entity serving as director/ (daily) manager must appoint a physical person as their permanent representative.
  • The permanent representative of a legal person may not also sit on the same board in a different quality i.e. representing another director or be a director him or herself.

II.   From Private Limited Liability Company (SPRL/BVBA) to Limited Liability Company (SRL/BV)

The SPRL/BVBA will cease to exist in its current form and will be transformed into a more flexible company: The Limited Liability Company (SRL/BV).

Most notable changes

  • In the SRL/BV, there is no minimum capital requirement – however, every company must have sufficient funds to sustain its activities.
  • The abolishment of the concept of capital implies that financial plan requirements and distribution rules are stricter.
  • A large portion of the SRL/BV rules are optional, leaving room to tailor the management of Belgian entities to that of their international parents.
  • In exchange of shares, contributions can now be made not only in cash and in kind but also in industry. Contributors of know-how are now allowed to participate in the profits.
  • Prior to distributing a dividend, the managing body must conduct a solvability and a liquidity test. The distribution of a dividend may not result in negative net assets.


  • The SRL/BV can issue a variety of securities, not just shares. It can be a listed company.
  • Articles of association can foresee the possibility for the shares to have multiple voting rights.
  • The articles of association can also provide for the free transfer of the shares i.e. without requiring the consent of the majority of the shareholders holding ¾ of the total number of shares.


  • The SRL/BV can have one or several directors. Where there is more than one director, the board can be collegial or not.
  • The directors can be appointed in the articles of association or not. Non statutory directors can be revoked ad nutum unless otherwise provided for in the articles of association. The shareholders or the articles of association can also foresee that the directors who are revoked will be indemnified.
  • The SRL/BV now has the possibility to appoint a daily manager(s) (legal or natural persons).

III.   What about my Public limited liability company SA/NV?

Unlike the SRL/BV, the SA/NV will continue to exist in its current form, including the required minimum capital of 61.500 EUR. The idea is that the SA/NV is intended for very large (possibly listed) companies with a large shareholder structure.

The Code introduces an overall flexibility and allows you to tailor your SA/NV to your needs. For example, different types of shares will now be possible: shares with voting rights, shares with multiple voting rights and shares without voting rights.

The Code allows you to reflect on the most optimal solutions for your SA/NV: a dual management board or rather a unitary board? Shares with multiple voting rights or shares without?

A management to fit your needs

  • Management can be structured in one of three ways: (i) unitary board (default); (ii) dual board; and (iii) a single director. The current governing board will be abolished.
  • The dual board consists of a supervisory board and a governing council with membership being mutually exclusive.
  • With unanimous consent, written resolutions are possible (unless the Articles of association stipulate otherwise). Further, the procedure is expanded to include the adoption of annual accounts and the use of share capital.
  • Directors automatically have a self-employed status and are presumed to be remunerated.
  • Directors must no longer be revocable ad nutum, meaning they can be granted a notice period or severance pay by companies either in the articles of association or by decision of the shareholders.

Flexibility for shareholders

  • Plural ownership is no longer required; The SA/ NV can have a sole shareholder.
  • At any time during the financial year, an interim dividend can be distributed to the shareholders (if provided for in the articles of association). The dividend can only result from the profits of that financial year, increased or decreased with the profit or loss carried forward.
  • Non-listed companies can deviate from the 1:1 shares/voting rights ratio as long as at least 1 share has voting rights. Listed companies can grant long-term shareholders (shareholders that have held their paid-up shares for at least two years) double voting rights in the articles of association.
  • Shares without voting rights will no longer be subject to any limitations aside from their right to vote on decisions impacting their shares (e.g. restructurings). Shares without voting rights are no longer required to be compensated by way of a preferred dividend.

Inalienability clauses

Inalienability clauses can be justified by a legitimate interest which is initially required but not throughout the duration of the clause. They must be limited in time.

  • Inalienability clauses for an unspecified period can be revoked at any times (with respect of a reasonable notice period).

IV.   Restructuring

In addition to classic transactions such as mergers, demergers, the new Code now explicitly recognizes transactions that are already frequently used in practice but were not previously defined: the partial demerger and the cross-border demerger.

An interesting new transaction for holding companies is the introduction of the ‘silent’ partial demerger.

Take-overs by 90% were already possible but have now become even more interesting in practice since SA/NV are no longer required to have multiple shareholders.

New transactions?

  • Partial demergers are now defined in the new Code which refers to the procedural rules of the classic demergers.
  • The cross-border demerger is now formally recognized. Again, consistent with an already developed practice.
  • Holding companies (owning 100% of shares in a subsidiary) can now organize a so-called ‘silent’ partial demerger; a transaction where a part of a company’s assets and liabilities is transferred to a holding company. In such cases the issuance of new shares would obviously be without purpose.

Technical changes

  • Retroactive accounting is limited to the first day following the closing of the financial year for which the accounts were already approved.
  • In case of dual boards, the supervisory board is assigned competence for the purposes of restructurings.
  • A notice period of 6 weeks needs to be taken into account starting from the filing of the proposal at the registry until the general meeting. As a consequence, the publication in the Belgian State Gazette does not interfere with this deadline.
  • The possibility of a take-over by a 90% shareholder will no longer be limited to the SA/NV but will be expanded to the SRL/BV that holds a 90% participation in another company. In such cases the management (instead of the shareholders meeting) of the receiving company can decide on the merger. Of course, the shareholders of the other company still have to approve the merger.
  • Because of the abolition of the concept of capital in the SRL/BV, accounting par value cannot be used when calculating the maximum cash surplus in these company forms. Therefore, for the purposes of restructuring the new Code equates accounting par value with the sum of contributions and available reserves, divided by all shares.

V.   Transition

Entry into force

The new Code will enter into force in phases. It will be applicable to newly formed companies as of 1 May 2019. Existing companies can decide to opt-in, in which case the Code will also become entirely applicable to them as of the date of the modification of their articles of association.

Also applicable to all companies as of 1 May 2019, are the new rules regarding the resolution of internal conflicts, statutory seats and abolition of certain criminal acts.

As of 1 January 2020, all mandatory provisions will be applicable to companies existing before 1 May 2019.

Regularization of your company

As of 1 January 2020, whenever you change your articles of association, for any reason, these must be entirely amended to comply with the new Code which will then become entirely applicable. Any omission will result in director’s liability.

The final deadline for regularization is 1 January 2024.