Frequently Asked Questions
Below you may find a selection of the most frequently asked questions we receive in our practice. More information will be added in the future as the BCAC will become part of the day-to-day corporate life.
The new Belgian Companies and Associations Code (BCAC) was introduced to answer the need for an efficient, attractive framework tailored to the modern business environment. Taking this into account, the legislator limited the number of company types and included non-profit organisations into the scope of the Code. The very flexible (and “capital free”) BV/SRL (past BVBA/SPRL) is intended to become the ‘default’ company type for non-listed companies. Furthermore, the BCAC provides multiple options for the management structure of an NV/SA, as well as the possibility for multiple voting rights (or double voting rights for listed companies). Last but not least, the registered office (statutory seat doctrine) is introduced as the benchmark for determining the applicability of Belgian company law.
The introduction by the Belgian legislator of a new Belgian Companies and Associations Code (BCAC) had several objectives: a broad simplification of the current regime, a high degree of flexibility and an update of Belgian company law in view of European evolutions. In line with these objectives, and particularly the simplification objective, the legislator decided to reduce the number of existing company forms.
The new Belgian Companies and Associations Code (BCAC) has replaced the BVBA/SPRL with a “new” form of company: the BV/SRL (besloten vennootschap / société à responsabilité limitée). The intention of the legislator is to make the BV/SRL the standard company form that can be easily customised through its articles of association. The BV/SRL allows for more flexibility than the BVBA/SPRL in terms of, inter alia, funding (with the abolishment of the minimum share capital requirement), distribution of profits and governance.
The key dates to bear in mind are 1 May 2019, 1 January 2020 and 1 January 2024. On 1 May 2019, the new BCAC has entered into force for all new companies and associations. On 1 January 2020, the mandatory provisions of the new BCAC became effective on all existing companies and associations. The transitional period of the BCAC expires on 1 January 2024, on which date all companies must have adapted their articles of association to the new BCAC
The BCAC abolished certain company types such as the partnership limited by shares (Comm.VA / SCA) and the cooperative company with unlimited liability (CVOA / SCRI). For these companies, the provisions of the corresponding legal forms will apply until they have converted their company into either the corresponding legal form or any other company type. Amending the articles of association is inevitable, better sooner than later.
Some notable changes have been introduced for directors, especially in the NV/SA (‘public limited liability company’) with more flexibility in terms of dismissal and liability protection. The most prominent changes for an NV/SA are the abolishment of the public order character of the ad nutum dismissal of directors and the introduction of a capped liability regime.
This article provides a high-level overview of the most significant changes resulting from the new Belgian Companies and Associations Code for Belgian listed companies. Among the topics discussed are the new governance models, loyalty voting shares, the impact of the abolishment of certain legal forms, the related party conflict of interest procedure and the new independence criterion for independent directors.
The new Belgian Companies and Associations Code (BCAC) provides for some changes that might impact M&A transactions, but without significantly changing the existing M&A practice. These changes include the strengthening of the enforceability of share transfer restrictions clauses, the increase of mandatory entries in share registers, the extension of the rules on the transfer of partially paid-up shares, an increased flexibility in the financing of M&A deals, enhanced legal certainty for some exit mechanisms and simplified corporate approvals.
The renewal of the new Belgian Companies and Associations Code has an impact on various tax rules. Certain tax rules have therefore been modified in light of a.o. the abolishment of certain Belgian legal company forms, the introduction of the statutory seat doctrine in the Company Code and the abolishment of the notion of capital.
The changes brought by the BCAC impacting financing transactions are relatively limited. Most notable are:
- Abolition of share capital in BV/SRL
- Increased flexibility for share transfers in BV/SRL
- Scope of change of control clause approvals limited to listed companies
- New criterion for applicability of Belgian company law
- Cap on director’s liability
The new Belgian Companies and Associations Code (BCAC) introduces a welcome simplification and flexibilisation of the corporate legal framework, offering new opportunities in the context of family owned businesses (FOBs) and succession planning. The most prominent changes for FOBs and succession planning are the possibility to firmly secure a directorship in the NV/SA and the almost endless flexibility to tailor voting rights and dividend rights on shares.
With the introduction of the new Belgian Companies and Associations Code (BCAC), the Belgian legislator aims to increase the competitiveness of the Belgian corporate landscape, by enhancing flexibility and introducing a thorough simplification. The following is a brief and non-exhaustive overview of how and to what extent the BCAC could render Belgian companies more attractive to private equity and venture capital investors.
On 1 May 2019, the new Belgian Companies and Associations Code (BCAC) entered into force, governing in one single instrument all companies, (international) non-profit associations ((I)NPA(s)) and foundations under Belgian law. Three major changes can in particular be highlighted for INPAs.
The scope of entities eligible to qualify as a cooperative is narrowed down. The cooperative company is now reserved for ‘true’ cooperatives. Existing cooperative companies that do not fit in the new definition must convert to another legal form. Furthermore, the cooperative company with unlimited liability disappears.
The new Belgian Companies and Associations Code (BCAC), to a certain extent, limits the flexibility that cooperative companies have under the former Belgian Companies Code (the BCC) in terms of governance and internal regulations, and introduces mandatory rules on conflicts of interest. Certain changes for other legal forms are also applicable to the cooperative company, such as the cap on liability of directors, the abolishment of share capital (requirements), changes regarding the form and content of the share register, distributions, possibility of communications through e-mail, etc.
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