Chances are you’ve already heard it several times: on 1 January 2020, the new Code of Companies and Associations (CCA) will enter into force.
We would like to remind you of some important changes you need to take into account from 1 January onwards, given their mandatory nature:
The prohibition of “double seats” in a management body
A private individual is no longer allowed to be part of the management body of a company through multiple mandates, meaning it is not possible anymore to accumulate within the same management body mandates as private individual and as permanent representative of a legal person-director.
A “cascade” is no longer allowed either. A legal person-director must appoint 1 natural person as permanent representative, without any other intermediate legal persons.
Modification of terminology
Particularly for the SPRLs/BVBAs, the following terminological changes will take place. “SPRL/BVBA” becomes “SRL/BV”, “managing directors (gérants/zaakvoerders)” are now “directors (administrateurs/bestuurders)” and “associates (associés/vennoten)” turn into “shareholders (actionnaires/aandeelhouders)”. The new terminology is obligatory to use in all forms of communication such as letters, invoices, orders, minutes, e-mails and website as of 1 January 2020.
Abolition of the concept of capital for SRL/BV
A SRL/BV will become a company without capital. On 1 January 2020, the capital and the legal reserve of a SPRL/BVBA will be converted by operation of law, without the fulfilment of any formality, into a statutory unavailable equity account. This means you will only be able to free the funds again by modifying the articles of association before notary.
New rules for distribution in SRL/BV
Every distribution of equity for a SRL/BV (dividend, bonus, purchase of own shares, distribution of equity in comparison to previous capital reduction, …) can only take place providing a double test has been carried out:
no distribution in case the equity is or becomes negative, and
if a statutory unavailable equity account exists – no distribution in case the equity is or becomes lower than the unavailable equity account;
liquidity test: no distribution if the company is expected not to be able to pay its debts due within a year.
New procedure on conflicts of interest
A more stringent procedure needs to be applied if directors have a conflict of interest with a decision that needs to be taken by the management body.
Opportunities according to the new Code of Companies and Associations
The Belgian legislator has provided a transition period to align the articles of association of your company with the new Code. The deadline is set for 1 January, 2024, unless you plan to make amendments to the articles sooner and are therefore obliged to modify them.
However, planning the amendments of the articles as soon as possible is quite beneficial.
As mentioned above, a couple of mandatory rules enter into force as of 1 January 2020. It is, however, not always stated clearly in the new Code whether a stipulation is mandatory or not, hence the confusion. Do you have to apply the new Code because of its mandatory nature or because the articles of association contain different clauses?
Another, perhaps more relevant reason to amend the articles without delay: the Code gives you the opportunity to create custom articles that meet your specific needs. Flexibility and simplification are key in the new Code, so be sure to make use of it.
A handful of examples
Possibility to issue shares with multiple voting rights, unequal voting rights or no voting rights
Possibility of having only 1 shareholder in a SA/NV
Free transferability of shares, in the SRL/BV as well
Board of directors’ flexibility
Possibility to abandon the principle of ‘ad nutum dismissal’ of a director. Job protection for directors is now possible
Less strict rules for written decision-making
New management models for the SA/NV
Possibility of 1 director with or without right of veto
Dual management: supervisory board and executive board with each their own exclusive powers. The current management committee will be abolished
Possibility to appoint a daily manager in the SRL/BV
Purpose | Opportunities | Implementation
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