Legal Alert - New code of companies and associations
The die has been cast! After years of preparation, the federal parliament voted in favour of the
introduction of the Belgian Companies and Associations Code on February 28, 2019 (BCC).
What does this reform mean for your company?
Entry into force
As a result of this approval, the new BCC will come into force as from 1 May 2019. Companies that are set up after this date are then fully subject to the new regulations.
For companies established before the date of entry into force, transitional measures are provided:
- Until 1 January 2020, these companies will remain subject to the old Company Code and you will not have to take any action. You may, however, make the transition to the new BCC by voluntarily adapting the articles of association of the company to the new law (opt-in).
- From 1 January 2020, the BCC will also apply to these companies. If you wish to amend the articles of association after this date, the articles of association of your company must be adapted to the BCC. Moreover, from then on, all provisions of imperative law from the BCC automatically apply to your company.
- By 1 January 2024 at the latest, existing companies must ultimately fully comply with the new regulation, and the articles of association of your company must therefore be adapted to the provisions of the BCC.
The most important modifications
Limiting the number of company forms
In principle, the BCC only retains four company types: the public limited company (NV), the private limited company (BV) that replaces the so-called "BVBA", the cooperative company (CV), which replaces the so-called "CVBA" and the partnership. As a variant of the partnership, however, the general partnership (VOF) and the limited partnership (CommV) also remain.
The BV without capital
The BVBA is replaced by a more flexible form, without capital and with greater statutory freedom; the private company (BV).
When a BV is set up, no (minimum) capital will have to be formed, which does not prevent the founders from having to make a sufficient contribution in view of carrying out the activities of the BV. The abolition of the capital will result in the capital of existing companies being converted into a statutory unavailable equity account with effect from 1 January 2020.
The abolition of the notion of capital also entails a completely new arrangement in the area of profit distribution, in order to sufficiently protect the company’s creditors. Whenever you wish to distribute a profit from your BV, this distribution will be subject to a double test: the balance sheet test and the liquidity test.
Elimination of plurality requirement
Unipersonality becomes the basic principle for a BV and NV. In other words, these can now be created and held by one person.
New management model in the NV
The BCC gives the founders of an NV the opportunity, in addition to the monistic management model that we know today, to opt for a sole director or for a dual management model, in which both a management board and a supervisory board are set up.
In addition, the ad nutum principle becomes optional, and it is thus possible to provide for a notice period and/ or a termination indemnity for directors.
Multiple voting rights will become possible
In the BV and the NV it becomes possible to create shares with one vote or with multiple voting rights.
Transition from real seat theory to incorporation theory
The real seat theory is abandoned in favour of the incorporation theory. This implies that under the BCC your company will be subject to the law of the country where it was incorporated, regardless of the place where it carries out its activities.
Limit for director’s liability
The liability of directors is limited in the BCC to a maximum amount in function of the size of the company under the BCC. The directors’ liability will also apply to the de facto directors.
Do not hesitate to contact us should your require more information or advice.