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