24 February 2021

Assessment of one year Code of Companies and Associations

The most important changes of 2020

The Belgian Code of Companies and Associations (BCCA) entered into force on 1 May 2019 for newly incorporated companies and on 1 January 2020 for existing – and therefore all – companies. At the turn of the year, De Langhe Attorneys took stock of one year of BCCA with a brief overview of the most important changes since its entry into force.

Concept of “Control”

To determine whether or not a company has control over another company, not only the voting rights attached to ‘shares’ but those attached to ‘other securities’ (e.g. profit participation certificates) must be taken into account from now on as well. 

Daily management 

The obligation for a private limited liability company (“besloten vennootschap”, abbreviated as “BV”) or a cooperative company (“coöperatieve vennootschap”, abbreviated as “CV”) to include in its articles of association the appointment, dismissal and powers of persons in charge of the daily management, has been abolished. As with a limited liability company (“naamloze vennootschap”, abbreviated as “NV”), it is the management body that decides on the appointment of persons in charge of the daily management. 

Breach of rules on distributions

The legislative amendment of 28 April 2020 stipulates, as in the (former) Belgian Companies Code, that if a dividend or other payment is made in violation with the distribution rules that apply to the BV, CV or NV, the company can reclaim the dividend or other payment not only from its shareholders, but also from all other persons who have unlawfully received a distribution (e.g. from a director in the case of unlawfully obtained directors’ fees (“tantièmes”). 

Increase of powers of the shareholders’ meeting 

An increase of the powers of the shareholder’s meeting stipulated in the articles of association of a BV, CV or NV cannot be enforced against third parties, not even if it has been made public and not even if there is any evidence that the third party was aware of such increase. 

Liability of the sole director of an NV 

Notwithstanding the general principle of joint and several liability between a director-legal entity and its permanent representative, the permanent representative of an NV with a sole director, whereby the articles of association stipulate that the sole director is jointly and severally liable for the obligations of the company, is not personally liable for the company’s obligations. 

Purchase of own shares

A notarial intervention is no longer required for authorisation of an NV’s shareholders’ meeting to purchase its own shares. Such authorisation may be included in the articles of association, but this is not mandatory.

Improper use of the abbreviation ‘CV’

Existing cooperative companies with limited liability (“coöperatieve vennootschappen met beperkte aansprakelijkheid”, abbreviated as “CVBA”) that do not meet the definition of the cooperative company (as understood by Book 6 BCCA) may not use the designation ‘CV’. Moreover, the fixed portion of the capital and the legal reserve of CVBA’s shall not be automatically converted to an ‘unavailable equity account’ as of 1 January 2020. Until their conversion (i.e. no later than 1January 2024), these CVBA’s remain subject to their former naming and capital rules of the (former) Belgian Companies Code.

Sole shareholder 

If the BV or the NV only has one shareholder, the identity of the sole shareholder must be recorded in the company file (kept at the competent clerk’s office). 

UBO register

It is generally known that under anti-money laundering legislation, a company is obliged to report the information it has about its ultimate beneficial owner to the UBO register. The Belgian Act of 20 July 2020 now also obliges the ultimate beneficial owners themselves to submit information about their identity to the company, under penalty of an administrative fine (between 250 EUR and 50 000 EUR). 

Organization of shareholders’ meetings and board of directors’ meetings

At the time of the first COVID19 lockdown, a number of rules regarding the organization of the shareholders’ meeting and the board of directors’ meeting were made more flexible via a Royal Decree. The Belgian Act of 20 December 2020 now provides for a permanent mitigation in the BCCA regarding the organization of the shareholders’ meeting (but not regarding the organization of the board of directors’ meetings). 

For example, it is no longer required that the articles of association provide for the possibility of remote participation in the shareholders’ meeting by electronic means of communication made available by the company. The board of directors’ meeting can now simply take initiative in this regard.

Sara Burm – Nicolas Nimmegeers 

Published in VOKA – Ondernemers, VOKA Kamer van koophandel West-Vlaanderen, editie 02 2021

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