Yellow sky - climbing people, statutory auditor Belgium

When it is mandatory to appoint a statutory auditor?

Marc Verbeek, Bart Apers
13/06/2021
Yellow sky - climbing people, statutory auditor Belgium

Everyone knows the criteria for determining whether or not a company is 'large' and therefore, in principle, must appoint a statutory auditor.  But what if a company is part of a group that must or must not consolidate? And what if the company is part of an international group?
What follows is a short summary.

 

Stand-alone companies   

A company is considered to be large and must therefore appoint a statutory auditor if more than one of the following three criteria is exceeded:

  • Annual average workforce: 50 employees
  • Annual turnover excluding VAT: 9,000,000 euros
  • Balance sheet total: 4,500,000 euros

If more than one of these three criteria is exceeded or no longer exceeded, this only has consequences if this occurs in two consecutive financial years. The consequences will then take effect from the following financial year. Suppose: a company exceeds more than one of the three criteria for the financial years 2019  and 2020, then it will be considered large as from the financial year 2021 and must appoint a statutory auditor.

 

Companies that are part of a Belgian group that is required to consolidate

When a company is part of a group of companies that are obliged to consolidate, a statutory auditor must be appointed even if the company concerned is considered small in itself. In Belgium, the consolidation obligation exists for any company that alone or jointly controls one or more subsidiaries or forms a consortium, except:

  • When the company itself is a subsidiary.
  • When the company is a parent company that only has subsidiaries of negligible significance.
  • When the company is part of a group of ‘limited’ size.

A group of ‘’limited’ size is then a group that on a consolidated basis does not exceed more than one of the following criteria:

  • Annual average workforce: 250 employees
  • Annual turnover excluding VAT: 34,000,000 euros
  • Balance sheet total: 17 million euros

These criteria must be verified on the closing date of the consolidating company's financial year. If more than one of these three criteria is exceeded or no longer exceeded, this only has consequences if this occurs in two consecutive financial years. The consequences will then take effect from the following financial year.

 

Companies that are part of an international group that is required to consolidate

Also when a company is part of an international group of companies that is obliged to consolidate, a statutory auditor must be appointed. In this regard, consideration should be given to the rules on consolidation obligations that apply abroad, which may be stricter than the Belgian ones, so that, the case being, consolidation must be carried out more quickly there than in Belgium.

It is therefore possible that a small Belgian company has to appoint a statutory auditor because of a consolidation obligation abroad.

 

Sanctions

If a statutory auditor is not appointed, the following sanctions may be imposed:

  • Judicial appointment of a statutory auditor: this can be requested by any party that has an interest.
  • Nullity of the resolution of the general meeting approving the annual accounts.
  • Directors' liability for violation of the company law.
 

Conclusion

In particular, companies that are part of an international group must ensure that they are aware of the consolidation rules abroad.

 

Marc Verbeek
Marc Verbeek
Tax Partner
Crowe Spark