Simplification for Belgian company creation
.Good news for company creation, as a new reform came into effect on May 1, 2019. Indeed, on February 28, 2019, Parliament voted for a modernization of Belgian company and association law. So, what is the purpose of this new reform? What does it mean for your company or future company? You'll find all the answers to these questions in this article. The entire Flexina team wishes you a good read. Follow the guide!
What is the purpose of this new reform?
This new reform addresses constraints such as:
- insufficient funds;
- the number of statutes;
- mandatory partners, etc.
When creating a company and to avoid discouraging future companies, this reform aims to promote new companies by making the system easier and more flexible, accessible to everyone.
Reduction in the number of statutes and easier choice
Thanks to this reform, the number of companies has gone from 17 to 4:
- Public Limited Company (SA);
- Limited Liability Company (SRL);
- Cooperative Company (SC);
- Simple Company (SS).
We no longer speak of SPRL, but of SRL
- SPRL: Private Limited Liability Company;
- SRL: Limited Liability Company.
Since 01/05/2019, the SPRL has become the SRL. Additionally, several modifications have been made, including:
- capital contribution and its release is no longer mandatory: in the SRL, it's no longer necessary to contribute starting capital and to mandatorily release part of it. However, a contribution such as your know-how or an idea is necessary;
- reinforced financial plan: since the contribution of money or goods is no longer necessary and to verify that the founder(s) have planned sufficient means for their activity, the establishment of the financial plan has been reinforced by demonstrating all sources of financing, profits and expenses of the company for a period of at least two years after its formation;
- modification during distribution of profits or reserves: so that directors' liability is not engaged, the distribution of profits or reserves is only possible if net assets don't become negative and if debts can be repaid over a 12-month period;
- reduction in the number of shareholders: the number of shareholders has been reduced from two to just one. The latter can be a legal entity or natural person;
- the SRL becomes much more flexible than the SPRL: all categories of securities (except profit shares) can be issued. In the SPRL, one share equaled one vote. In the SRL, we have the choice to grant for each type of share the number of votes we want (none, only 1 or several);
- shares can now be transferred more easily: thanks to the relaxation of rules, it's much easier to transfer shares.
The SRL and SA can be founded by a single person
For the creation of an SRL and an SA, it's not mandatory that either be founded by several people. Warning: this doesn't apply to associations.
Number of founders for creating SC, SNC and SComm
Now let's talk about the number of founders for creating an SC, an SNC or an SComm:
- an SC: requires a minimum of three founders;
- for simple company, SNC and SComm: two founders are necessary;
Note that for all these companies, the founder can be a natural or legal person.
Less liability for company directors
This reform plans to minimize directors' liability.
From now on, it's limited to a maximum amount and varies according to turnover and balance sheet total (this affects both the company and third parties) during the last three years.
Warning, this limitation doesn't apply to tax or social debts, serious tax fraud, repeated minor faults or serious misconduct, and any intent to defraud.
Here's a table showing the different limits:
| Limited to | Turnover (excl. VAT, in €) | And/or | Balance sheet total (€) |
|---|---|---|---|
| 120,000 € | between 0 and 350,000 | AND | between 0 and 175,000 |
| 250,000 € | between 350,000 and 700,000 | AND | between 175,000 and 350,000 |
| 1,000,000 € | between 700,000 and 9,000,000 | OR | between 350,000 and 4,500,000 |
| 3,000,000 € | between 9,000,000 and 50,000,000 | OR | between 4,500,000 and 43,000,000 |
| 12,000,000€ | >15,000,000 | OR | >43,000,000 |
Company nationality becomes EU-compliant
With the new reform, a company created in Belgium that opted for Belgian law will now be considered a Belgian company even if its main headquarters is abroad. A foreign company can move its headquarters to Belgium and thus adopt Belgian law.
Example:
A company that according to its statutes is established in France, but whose management and production are in Belgium will no longer be subject to Belgian company law as was the case in the past. The company's nationality will be based on its statutory headquarters and French company law will therefore apply.
This reform also applies to existing companies
This reform also applies from 2020 to all existing companies and associations, which will have until January 1, 2024 to make the change. In case of a modification, even minor, of its statutes, these will automatically be adapted to the new code.
You now know more about the new company law reform. What do you think about it? Feel free to share your impressions about this reform. And don't forget to come test our online invoicing software for 15 days. You can also contact us if you have questions or need additional information.
