The word is out!
After a long legislative process, the Code for Companies and Associations (Wetboek voor vennootschappen en verenigingen/ Code de sociétés et des associations) was adopted yesterday, 28 February 2019. The new Code is the most far-reaching reform in the history of Belgian company law. It aims to modernize and simplify Belgian company law, in order, among others, to create better opportunities to start up a business in Belgium.
The new Code brings along changes to many material aspects of Belgian company law. Some of the most appealing changes are the following:
- Reduction to four company types: (i) public limited liability company (Naamloze vennootschap/Société anonyme), (ii) private limited liability company (Besloten vennootschap/Société à responsabilité limitée), (iii) cooperative company (Coöperative vennootschap/ Société coopérative) and (iv) a partnership (Maatschap/Société de droit commun). Company founders will have to choose between these types and the existing companies, if established in a different form, will have to be converted to one of these types.
- Possibility of incorporation of a company by a sole founder and shareholder
- Abolishment of the share capital requirement for the incorporation of a private limited liability company.
- Introduction of multiple voting rights and loyalty shares.
- More flexibility for company’s management bodies: ad nutum termination of the directorship mandate will be optional and all companies will be granted the possibility to be managed by a sole director.
- Implementation of the incorporation theory: all legal entities having their registered seat in Belgium will have to comply with Belgian company law.
The new Code will enter into force on 1 May 2019 and will apply from that date to all legal entities incorporated after 1 May 2019.
For existing legal entities, the legislator has provided an opt-in transitional period until 1 January 2020. As of 1 January 2020, every modification of the articles of associations will have to comply with the Code. However, if the articles of association remain unchanged until 1 January 2024, the entity in question will be subject to the new legislation as from that date. After 1 January 2024, all legal entities will have to be compliant with the new Code.
The “times are a-changing”. Van Olmen & Wynant’s corporate team is happy to assist and guide you and your company through this change in all aspects of (the old and) the new Belgian company law.