The new Belgian Code of Companies and Associations ("CCA") : when and how will its new clauses come into effect? And what about the current shareholder agreements? 

New companies

For new companies that are established as from 1 May 2019 (deposit of the deed of incorporation as from 1 May 2019), it is clear that the new Code of Companies and Associations ("CCA") will come into force immediately. For these new companies, the BV (limited liability company) will be the preferred form.

Existing companies

For existing companies, the situation is somewhat more complex:

From 1 May 2019, they can opt to apply the new CCA by means of an opt-in. This requires an amendment to the articles of association before notary in order to bring the articles of association fully into line with the new rules, with publication in the Belgian Official Gazette.

If they do not opt in, the following provisions of the new CCA will have immediate effect from 1 May 2019:

      the statutory seat rule (new article 110 WIPR): the previously applicable actual seat rule no longer applies.

      the new shareholder dispute settlement (including the squeeze-out rules) will apply immediately to disputes brought before the courts as from 1 May 2019

As from 1 January 2020, companies will be obliged, at the time of their next amendment of their articles of association, to fully adopt the new CCA. Final deadline is 1 January 2024 (see our previous contribution).

In any case, as of 1 January 2020, the following provisions will be mandatory, even if the articles of association have not yet been amended (!):

the new names and abbreviations of companies (Article 1:5 of the Companies Code). Thus, a BVBA becomes a BV, a CVBA becomes a CV.  This should be reflected in all external communication: website, correspondence, invoicing...

the exclusion of employment contracts for directors (art. 5:70 CCA and 7:85 CCA), members of the supervisory board (art. 7:105 §2 CCA) and the executive board (art. 7:107 CCA)

the conflict of interest rules at the board of directors’ level (Articles 5:76, 7:96 and 9:8 of the Dutch Civil Code)

the profit distribution scheme in the BV (Sections 5:141 to 5:144 of the CCA)

the rules on directors' and officers' liability (Articles 2:56 to 2:58 of the UTHR)

the nullity of resolutions of the management board and general meeting (bodies) (Articles 2:41 to 2:48 of the BCC)

the rules relating to liquidation (Articles 2:76 to 2:108 of the CCA)

the rules governing judicial dissolution for legitimate reasons (Articles 2:73 to 2:75 of the UTHR)

 the possibility to inspect the register of shareholders (Articles 5:24, 6:24 and 7:28 of the Companies Code)

The so-called  ‘alarm bell’ procedure in the BV (art. 5:153 WV)

the joint and several liability of an administrative body of a non-profit association in the event of conversion (Articles 14:45 and 14:50 of the CCA).

A number of mandatory provisions of the "old" Companies Code are abolished. For example, the maximum limit of 20% is stated for the purchase of own shares.

Furthermore, the additional provisions of the new CCA will also apply, insofar as they have not been excluded by the company's existing statutory clauses. The existing articles of association will therefore continue to take precedence over the additional provisions of the new law until such time as they are adapted to the new CCA (and to the extent that they do not conflict with the aforementioned mandatory provisions of the new CCA).  Agreements in the articles of association about the number of directors, about nomination arrangements, transfer restrictions, etc. will therefore remain fully applicable. 

As from 1 January 2020, the transition to a BVBA and CVBA without a statutory capital will also take place: the paid-up part of the capital of a BVBA, and the legal reserve, will be converted by operation of law into a statutory unavailable equity account (which may subsequently be made available by a decision of the general meeting with a majority required for the amendment of the articles of association). The same applies to the paid-up part of the fixed part of the statutory capital and the legal reserve of a CVBA   The part not paid up is converted into an 'uncalled contributions' equity account. In the event of a full payment, a transfer is made to the statutory unavailable equity account.

And what about the current shareholder agreements?

 The CCA does not stipulate that it is immediately applicable to current agreements, so that they remain governed by the "old" law. The only exception to this are the mandatory provisions in the new CCA, which do apply immediately. This means that clauses in the shareholders' agreement that are contrary to these mandatory provisions are null and void by operation of law. Any provision in the articles of association, in an agreement or in a unilateral statement of will that is contrary to the provisions of this article shall be deemed to be inapplicable. 

An example: 

Art. 2:58 of the Companies Code with regard to directors' liability stipulates (1) that the liability of a member of a board of directors or of a managing director may not be limited further than stated in article 2:57 CCA (staggered maximum amounts depending on the size of the company), and (2) that the legal person, its subsidiaries or the entities controlled by it may not exonerate or indemnify in advance the persons referred to in the first paragraph against their liability towards the company or towards third parties.  Thus, existing indemnification clauses in a shareholders' agreement, or in a current contract between director and the company, will be null and void by operation of law as of 1 January 2020 in so far as they violate Article 2:58 of the CCA . Attention: indemnity clauses whereby a parent company or shareholder of the company indemnifies a director of the company remain valid. Of course, the company can still take out liability insurance for its directors.

Conversely, the maximum amounts provided for in Article 2:57 of the Companies Code apply automatically as from 1 January 2020. This may be a good reason for opting in earlier to apply the new law.

In any event, we strongly advice to review your existing shareholders' agreements in the light of the new CCA, at the latest at the time when the new law is adopted, whether by means of an opt-in before 1 January 2020, or by means of a first amendment of the articles of association after 1 January 2020.

****

Corbus will be happy to assist you in this transitional situation in order to review your articles of association and/or shareholder agreements in good time and to adapt them to the new rules. 

Do not hesitate to contact us if you have any further questions.

Dirk Huygens

Corbus Lawyers cvba


We use cookies to record your language preference and enhance your surfing experience. Know more[OK]