As you probably know, on 1 May 2019, the new Companies and Associations Code (abbreviated to CAC) entered into force. This modernization of the regulatory framework for companies sought to make Belgian company law more flexible and simpler.
In concrete terms, the amendment of the CAC means that, since 1 May 2019, shareholders and founders of companies have a great deal of freedom to determine the arrangements and rules within the company. The number of company forms has also been drastically reduced. This means that some of the 'old' legal entity forms will disappear and/or have to be converted into one of the legal entity forms under the new Belgian CAC before 1 January 2024. Also know that the mandatory provisions of the new company law are applicable since 1 January 2020!
You can always opt to only have the minimum required conversions made to your existing legal entity. However, since the change in the Belgian company code, a Belgian company is more than ever a 'tailor-made' product and can be adapted to your (professional and private) needs. For example, different types of shares can be created, different voting rights or profit rights can be allocated to different categories of shares/shareholders, there is more freedom to modulate the transfer of shares, there is a more extensive possibility to pay out interim dividends, there is more room for family enterprises to respond to family wishes and needs, etc.
Action to take!
Companies incorporated before May 1, 2019 will have to have their articles of association amended by December 31, 2023 at the latest in order to convert them in accordance with the new CAC and in certain cases the shareholders' agreements and the management and directors' agreements will also have to be amended.
Companies that have still not taken action after December 31, 2023 will be converted by operation of law into the legal form closest to the old form. Due to this automatic conversion (without amendment of the articles of association) you cannot, of course, take advantage of the opportunities offered by the new rules. In addition, if you fail to comply with the transposition deadline, you as a director may be held liable for any damages resulting from this negligence.
It is therefore important to tackle the transformation of your company in good time and to examine the possible opportunities of the new rules. The final conversion date seems far off, but it is not in view of the administrative process that must be completed in the context of the conversion (identifying opportunities, adjusting the articles of association, notarial ratification (where necessary)).
So take action as soon as possible in order to be ready with the adjustment in time. We are happy to assist you with the transformation of your company to the new CAC (where necessary in collaboration with our or your notary). You can always contact your contact person at Crowe for this.