Belgian Code of Companies and Associations (CSA / WVV) in English

An SRL without capital

The 2019 Code abolished the minimum capital of the Belgian private limited company. The SRL is now a company “without capital” (Art. 5:1). The protection for creditors moved elsewhere. The founders must provide equity that is sufficient for the planned activity (Art. 5:3), and justify it in a financial plan covering at least two years. The plan includes an opening balance sheet, projected accounts after twelve and twenty-four months and the assumptions behind them, and is handed to the notary before the deed is signed (Art. 5:4). The plan is not public, but it matters later: if the company goes bankrupt within three years, the court can make the founders pay part of its debts if the equity was manifestly insufficient (Art. 5:16).

Two tests for every distribution

Without capital to protect, the Code tests each distribution twice. The net asset test bars any distribution that would make net assets negative, or push them below equity the law or the articles make unavailable (Art. 5:142). The liquidity test requires the management body to find, in a report that is not filed, that the company will be able to pay its debts as they fall due for at least twelve months (Art. 5:143). The same thinking drives the alarm-bell procedure: once net assets are at risk of becoming negative, or the twelve-month liquidity outlook is no longer certain, the management body must call a general meeting within two months (Art. 5:153).

Shares, votes and exit

The SRL keeps a closed character by default: transfers to outsiders need approval (Art. 5:63). The rest is largely left to the articles. Each share carries one vote unless the articles provide otherwise, so multiple voting rights and non-voting shares are possible (Art. 5:42). The articles may also allow shareholders to resign at the expense of the company’s assets and be paid out a withdrawal share. Founders may do so only from the third financial year after incorporation (Art. 5:154). Shareholders can take any decision of the general meeting unanimously in writing, except amendments to the articles (Art. 5:85).

Directors

An SRL is run by one or more directors, who may or may not form a board. Unless the articles or the appointment resolution say otherwise, the general meeting can dismiss a director at any time without giving reasons (Art. 5:70). A director with a conflicting financial interest must abstain, and the decision goes to the other directors or, if there is only one, to the general meeting (Art. 5:76). Liability is capped by size, from 125,000 euros for the smallest legal persons to 12 million euros for the largest and for public-interest entities. The cap applies towards the company and third parties alike, but not to serious fault, habitual minor fault or fraud (Art. 2:57).

Registered office and applicable law

The articles need only name the Region where the registered office is located; the full address is optional. The management body may move the office anywhere in Belgium, unless the move would require the articles to be in another language under the language legislation: that decision belongs to the general meeting (Art. 2:4). Belgium follows the registered-office rule: the Code applies to legal persons whose registered office is in Belgium (Art. 2:146). Foreign legal persons may do business and open a branch here. A foreign legal person with a Belgian branch that has not filed its deed of incorporation cannot bring proceedings in Belgium (Art. 2:148).

The SA: capital is back

Unlike the SRL, the SA keeps a capital of at least 61,500 euros (Art. 7:2). Creditor protection follows from it: one twentieth of the profits goes to the legal reserve until it reaches a tenth of the capital (Art. 7:211), and no distribution may bring net assets below the paid-up capital plus unavailable reserves (Art. 7:212). When losses bring net assets below half of the capital, the board must call a general meeting within two months; below a quarter, one quarter of the votes cast is enough to dissolve (Art. 7:228). Below 61,500 euros, any interested party may ask the court to dissolve the company (Art. 7:229).

SA shares are freely transferable unless the articles, the terms of issue or an agreement restrict them; lock-up clauses must be justified by a legitimate interest (Art. 7:78). Listed companies may grant a double voting right to shares held in registered form for two years (Art. 7:53). The SA chooses its governance: a board of at least three directors (two while there are fewer than three shareholders), a sole director, or a two-tier structure with an executive board and a supervisory board (Art. 7:85, Art. 7:101, Art. 7:104).

Closing a company quickly

A solvent company can be dissolved and its liquidation closed on the same day, in a single notarial deed, if no liquidator is appointed, all debts have been paid or provided for, and the shareholders present or represented vote for it unanimously, with a quorum of half of the shares in an SRL (Art. 2:80). The management body must still present a report and a statement of assets and liabilities that is no more than three months old, reviewed by an auditor or external accountant (Art. 2:71).