The Remedial Act for the Code of Companies and Associations has been adopted

On 16 April 2020, the Belgian Parliament adopted the Act implementing certain improvements and corrections to the Code of Companies and Associations. In this article, we focus on a selection of these improvements and corrections.

We will not discuss mere technical amendments to the Code of Companies and Association ("CCA"), which are mainly aimed at aligning and making consistent the rules for each company form, the two language versions and cross-references. However, the Act also introduces some more material amendments, including the following:

  • The definition of control is slightly amended: not only the voting rights attached to shares but also those attached to other securities, such as profit-sharing certificates, must be taken into account. Therefore, the presumption of de iure control will be based on holding the majority of voting rights attached to "all securities of the company".
  • If a BV/SRL has only one shareholder, its identity must be stated in the company file (alignment with the regime for the NV/SA, following a European rule).
  • The director's liability for gross negligence that contributed to a bankruptcy under art. XX.225 of the Economic Law Code no longer falls under the quantitative cap for the liability of directors. This ground for liability was already excluded from the scope of the cap de facto, as, due to very last-minute amendments, the cap does not apply to gross negligence and recurring "normal" (light) negligence.
  • The statute of limitations for the nullity of resolutions of bodies is extended to the resolutions of the general meeting of bondholders, which can now only be challenged within six months.
  • The status of a legal cohabitant is assimilated to that of a spouse with respect to certain transfers of securities.
  • In a BV/SRL, a CV/SC and an NV/SA, the extension of the powers of the general meeting of shareholders in the articles of association may not be invoked against third parties even though it has been made public.
  • In a BV/SRL, it is now clear that holders of non-voting shares are also entitled to participate in the general meeting as observers (alignment with the regime for the NV/SA).
  • In a BV/SRL and an NV/SA, the authorised capital can never be used for the issuance of subscription rights in favour of one or more specific persons. As a result, the governance body is not entitled to issue subscription rights if the preferential subscription right of the shareholders has been limited or excluded in favour of one or more specific persons other than members of the personnel, even if it has been expressly authorised to do so.
  • In a BV/SRL, the forced exclusion and voluntary withdrawal of a shareholder may also take place outside the first six months of the financial year.
  • In a BV/SRL, it is now clear that the procedure for conflicts of interest should not be applied by the governance body when carrying out the liquidity test.
  • The permanent representative of the sole director of an NV/SA is not personally liable for the obligations of the company, even if the articles of association stipulate that the sole director is jointly and severally liable for these obligations. As a result, the regime is aligned with the regime for a partnership limited by shares under the previous Companies Code.
  • As regards the two-thirds majority required for the introduction of loyalty double voting rights in listed NV/SAs, it is clarified that the articles of association may provide for a more stringent majority, but only if they expressly refer to the introduction of such loyalty voting rights.
  • In a non-listed NV/SA, it is now clear that any person who has completed all the admission formalities for a given general meeting of shareholders must, in principle, also be admitted to any subsequent meeting with the same items on the agenda.
  • In an NV/SA, no notarial intervention is required for the authorisation by the general meeting of shareholders for the company to acquire its own shares, profit-sharing certificates or certificates. Such authorisation may but need not be included in the articles of association.

The improvements and corrections will enter into force on the day of publication of the Act in the Belgian Official Gazette.