Company law changed in Belgium as of 1 May 2019. This is important if you are doing business in Belgium or are planning to do so. We explain several of the most important changes below, which are clearly inspired by Dutch company law.

Company forms

Four company forms will exist in Belgium as of 1 May 2019. Existing companies will be converted into one of these forms. Companies that are being founded can choose from:

- BV (private limited company)

The former BVBA (the private limited company with limited liability) has disappeared and is being replaced with the more flexible BV. This company form is considered to be the ‘basic form’. The BV is mainly suitable for founders of small and medium-sized enterprises. Entrepreneurs face few restrictions in formulating the statutes, enabling them to establish a ‘customized’ company. For instance, it is possible to separate voting rights from the value of shares. This means that the company can be transferred without losing control completely;

- The partnership (maatschap), with two variants: the general partnership (VOF) and the limited partnership (Commanditaire vennootschap)

The partnership is the only company form that has no legal personality. It is easy to establish a partnership, which makes this form ideal in the context of inheritance planning. This form is also a good choice for professionals who aim to implement a temporary project together. The two variants of the partnership, the general partnership and the limited partnership do, however, have legal personality.

- The CV (the cooperative company)

The CV is suitable for companies that aim for a cooperative ideal. Three founders are always required to establish a CV. The aim of this company form is to meet the needs of shareholders and/or develop their economic and/or social activities. An example could be a group of local residents who aim to improve services in their neighbourhood.

- The NV (public limited company)

The NV is the company form for larger businesses in which raising capital is the main objective. Under the former company law, there were rigid regulations with respect to the Board, but these have been removed. From now on, the NV can be founded by one person.

No minimum capital requirement for BV and CV

Under the new company law, it is no longer mandatory to inject a minimum capital of €18,550 when establishing the company. On establishment, the company must, however, always have sufficient equity to be able to carry out its activities. It therefore remains important that a company has ‘sufficient starting capital’ supported by a detailed financial plan.

Strict rules also apply when equity is removed from the company. The company must first undergo a balance and liquidity test before dividends may be paid out. After payment of the dividend, there must be no negative shareholder equity and it must be possible to pay all due debts for the coming 12 months from this.

Labour and know-how instead of capital

If there is no injection of money or goods into the company, this does not need to be a problem. In the future a founder can also contribute labour and know-how in exchange for shares. This must be checked by an auditor. If the labour is suspended, the entitlements associated with shares are then also cancelled, temporarily.

Non-profit-making associations (VZWs) can make a profit

It’s not only for companies that things are changing. From now on VZWs also fall under the regulations for companies. VZWs may now also make a profit to realize a charitable goal. Any profit may not be paid out to members, as this is only possible for companies.

Establishment of BV and NV by one person

A BV and NV may now be established by one founder. It makes no difference whether the founder is a natural or legal person.

Multiple voting rights

The statutes of NVs and BVs that are not listed can deviate from the 1 vote - 1 share principle, as long as the company issues at least one share that represents at least one vote. This means that a company can, for instance, use shares with multiple voting rights, without voting rights or voting rights under certain conditions. This enables the capital and control to be spread more flexibly, which can, for instance, be handy in the context of family companies.

Greater statutory freedom

Under the new company law it is expected that many mandatory rules will now only be ‘supplemental’, which gives entrepreneurs the option to deviate from these. This offers greater freedom to design the statutes or shareholder agreements while also offering a safety net in the event that shareholders do not need or want to provide specific rules.

Directors’ liability

The new law provides general regulations for the directors’ liability of all legal persons. This therefore, includes the directors of non-profit-making associations and foundations. The regulations will apply to both the formal directors as well as to those who actually manage the company. An important change is that liability is limited to a certain maximum amount. This maximum depends on the legal person’s turnover.

The choice for national company regulations

Companies can choose the national company regulations under which they wish to fall. The company law that applies will be determined by the country stated in the statutes. This means that companies can move their activities to Belgium without falling under Belgian company regulations. Following on from this, a procedure is also being created for international transfer, making it easier for foreign companies to come to Belgium.

Changes to the statutes

Entrepreneurs are being given the time to introduce the changes, obtain advice and rearrange their statutes at a notary.

New companies have been under the new regulations since 1 May 2019. Existing companies have been able to opt-in to the new regulations from that date. The new regulations started on 1 January 2020 for existing companies, associations, and foundations. From that date the statutes need to be changed in accordance with the new legislation. 31 December 2023 is the final deadline for this. A company’s legal form will then automatically take one of the new legal forms. If the statutes are not amended in time, the Director will personally be liable for any potentially damaging consequences.

As you can see, a lot is changing for entrepreneurs. For instance, it will be easier for foreign companies to establish a branch in Belgium. At SPEE advocaten & mediation, although we advise on Dutch company law, we also work closely with lawyers and other specialists in Belgium where necessary, who can also support you on the other side of the border.

Do you have any questions or would you like advice on one of the preceding topics? Or are you considering moving or expanding your company to Belgium? If so, please feel free to contact one of our company law lawyers. We’d be delighted to put you on the right track.