... that you need to update the articles of association of your company on short notice?

A new set of rules has recently entered into force for your company, i.e. the new Belgian Code of Companies and Associations (the ‘CCA’). This means that every company, non-profit organisation or foundation will have to amend its articles of association in order to bring them in line with the provisions of the new CCA.

The new CCA, however, does not only bring obligations, but also many (flexible) opportunities. It will also give you the opportunity to make progress in the areas of digitalisation and modernisation.

In this newsletter, our multidisciplinary teams are happy to give you a brief overview of the main changes and help your company prepare for the digital present and future.

Main novelties

General

• It is no longer possible to partake in governing/management bodies (e.g. a board of directors) in more than one capacity (e.g. as permanent representative of a legal entity and at the same time as a physical person)
• New conflict of interest rules
• Multiple voting rights are possible

Public limited company (PLC – ‘NV’/’SA’)

• The company can be a ‘one man show’: a PLC can be founded by a single founder and be managed by a sole director
• Possibility of granting the director(s) dismissal protection

Limited company (LTD – ‘BV’/’SRL’)

• Not necessarily a ‘private’ character: it is now possible to ease the rules on the transferability of the shares of an LTD in the articles of association and even to make their transfer completely free from prior approval of the other shareholders
• Denomination: the legal form in Dutch and French changed from ‘BVBA’/‘SPRL’ to ‘BV’/’SRL’ - partner becomes shareholder - members of the governing body are no longer called a ‘manager’ (‘zaakvoerder’ / ‘gérant’) but a director (‘bestuurder’/ ‘administrateur’)
• Abolition of the concept of (minimum) share capital

Some relevant topics

Electronic decision making

The articles of association may offer shareholders the opportunity to participate remotely in meetings by using an electronic means of communication provided by the company.

This also applies to general meetings that must be held in the presence of a notary (e.g. amendment of articles of association).

Statutory email address – ‘eBox Enterprise’

The articles of association may specify an email address on which the company can be reached officially. This means that all official communication in a company can now take place by email, if the shareholders and directors in turn provide the company an email address on which they can be reached.

The legislator’s preference for the use of modern means of communication is also demonstrated by the launch of the ’eBox Enterprise’ tool.

This is the secure electronic mailbox that centralises all official communication between businesses and government institutions.

We are happy to help you if you want to make use of this tool.

Impact of shareholders’ agreement

Do not forget to thoroughly analyse your existing shareholders’ agreements and adapt them to the new rules. For example, there are new rules regarding voting arrangements and for provisions restricting the transfer of shares.

Timing

As from 1 January 2020

• Mandatory provisions of the CCA apply automatically

Since 1 January 2020, many rules already apply automatically to all existing companies, even if they were already incorporated and have not yet adapted their articles of association (the so-called ‘mandatory provisions’).

Statutory provisions that are in conflict with these mandatory provisions will be considered as non-existent.

Some examples of mandatory provisions are:

• not having the same individual more than once in the same governing body
• the impossibility of carrying out a directorship under an employment contract
• the new conflict of interest rules
• the rules on profit distribution in an LTD
• the obligation for the managing body of an LTD and a PLC to draw up a report each time new shares are issued (even in the case of a cash contribution)

In the absence of a clear list of all mandatory provisions, companies will be in a ’grey zone’ as long as they have not amended their articles of associations. In other words, it is not clear which rules you will have to apply in certain cases.

Therefore, it is worthwhile to take action now and adapt your articles of association to the CCA.

• New denominations apply automatically

For existing companies, the new denominations and abbreviations of the legal forms apply mandatorily as of 1 January 2020:

• a ‘limited company with limited liability’ (‘BVBA’/’SPRL’), now becomes a ‘limited company’ (‘LTD’ – ‘BV’/’SRL’)
• a ‘cooperative company with limited liability’ (‘CVBA’/’SCRL’) now becomes a ‘cooperative company’ (‘CC’ – ‘CV’/’SC’)
• a ‘cooperative company with limited liability’ which does not comply with the cooperative ideology, remains a cooperative company with limited liability until its conversion into another company form (e.g. an LTD)
• an ‘ordinary limited partnership’ (‘Comm.V’/’SCS’) now becomes a ‘limited partnership’ (‘LP’ – ‘CommV’/’SComm’)
• the abbreviation of a ‘general partnership’ in Dutch now becomes ‘VOF’ instead of ‘V.O.F.’

Since then, all documents issued by a company (e.g. invoice, website, etc.) must mention this new legal form (whether abbreviated or not).

1 January 2024: mandatory amendment of the articles of association

By 1 January 2024 at the latest, the articles of association of all existing companies must be brought into line with the provisions of the CCA.

The members of the managing body shall be personally and severally liable for any damage suffered by the company or third parties as a result of non-compliance with this obligation.

Better not wait until 2024!

Notaries, accountants and legal advisors will be heavily consulted in the second half of 2023. So act timely!

Do you have any questions? Our multidisciplinary teams are ready to help you upgrade your company. Feel free to get in touch with your trusted advisor within Grant Thornton or our legal team.