In the framework of the current corona-crisis and the upcoming annual shareholders’ meetings, Minister of Justice Koen Geens has adopted resolutions regarding the temporary flexibilization of the corporate rules so annual shareholders’ meetings can occur pursuant to the obligatory rules in the fight against the corona-crisis. Companies and associations can apply these flexibilizations regardless of the rules set out in their Articles of Association.

• Modified organization of the annual shareholders’ meeting

The annual shareholders’ meetings which have been or have to be convened prior to 19 April 2020 (this date can be delayed by the King in case the corona-measures are delayed), the Board of Directors is granted the authority to decide that the annual shareholders’ meeting will be held at the usual date, however via electronic or written means, as the case may be in combination with a vote by proxy. The shareholders will only be able to grant a proxy to the person designated by the Board of Directors.

• Postponement of the annual shareholders’ meeting

The annual shareholders’ meeting, even if it has been convened already, can be postponed until ten weeks following the ultimate date (i.e. 30 June for companies with a financial year parallel to a calendar year and consequently the annual shareholders’ meeting can be postponed until 7 September 2020).

• Written resolutions by the Board of Directors

In all circumstances, the Board of Directors can adopt unanimous written resolutions.

In addition, the Board of Directors is provided with the possibility to deliberate and decide via electronic communication which allows for a discussion between the directors.

The aforementioned flexibilizations are also applicable to non-profit associations.

If you have any questions, please feel free to contact Davy Smet.

The new Belgian company code has entered into force for some time now. Regardless of whether you undertake any action, the new Belgian company code will have an inevitable impact on your company as of 1 January 2020. The most important changes are, among others, the new names and abbreviations, capital that will be abolished for some companies and the rules governing the functioning of the general meeting and the board of directors that will be modified.

With effect as of 1 January 2020, the Companies and Associations Code (“CAC”) will also become applicable to companies which already existed on 1 May 2019. Even if you haven’t brought your Articles of Association in line with the CAC, the CAC will have an important impact on your company as of 1 January 2020.

The mandatory provisions of the CAC will become applicable.  Provisions included in your Articles of Association or agreements which are contrary to these mandatory provisions are considered to be non-existent.

The supplementary provisions of the CAC will also become applicable unless the Articles of Association of your company deviate from these provisions.

Below you will find an overview of the most important changes which may have an impact on your company as of 1 January 2020:

• The new names and abbreviations become applicable without the need to change the Articles of Association. For example: “Besloten Vennootschap met Beperkte Aansprakelijkheid” becomes “Besloten Vennootschap” and the abbreviation “BVBA” becomes “BV”.

• The capital concept is abolished for the Private Limited Liability Company (Besloten Vennootschap) and the Cooperative Company (Coöperatieve Vennootschap).

• The paid-up capital of the Private Limited Liability Company and the Cooperative Company, as well as their legal reserves, will, by way of law and without fulfilling any formality, be converted into a statutory unavailable equity account with effect as of 1 January 2020.

• A Private Limited Liability Company can only distribute profit considering the balance and liquidity test.

• In principle, the entire equity of a Private Limited Liability Company will be available for distribution taking into account the application of the aforementioned double distribution test and the fact that a modification of the Articles of Association will be required if (part of) the statutory unavailable equity is distributed.

• Distributing the profit of the previous financial year which has not been approved and the profit of the current financial year is made possible.

• The rules regarding the alarm-bell procedure are amended.

• Possibility to contribute work in a Private Limited Liability Company.

• All shares in a Public Limited Liability Company (Naamloze Vennootschap) and a Private Limited Liability Company can in the future be owned by one shareholder.

• A Public Limited Liability Company and a Private Limited Liability Company can issue all categories of securities (for example convertible bonds).

• Directors, members of the executive committee and the supervisory board perform their mandate on a self-employed basis. 

• The rules regarding daily management will become more flexible. In a Private Limited Liability Company, it will be possible to set up a daily management body. In addition, the definition of “daily management” is elaborated.

• The rules regarding conflicts of interests in a Public Limited Liability Company and a Private Limited Liability Company are made stricter and also become applicable to Cooperative Companies.  

• The new rules regarding director’s liabilities (including the cap on director’s liabilities) become applicable to management faults which occurred after the CAC has become applicable to your company. Management faults which have occurred before the CAC became applicable to your company remain subject to director’s liability regime of the Company Code.

• In the future, written resolutions adopted by the board of directors will always be possible, even if the Articles of Association do not include such option.

• The permanent representative of a director-legal person always has to be a physical person. This physical person can only have a seat in the board of directors in one capacity.

• The voting procedure during a general meeting is amended, for example the neutralization of abstentions. For certain companies this may have an impact on the existing balance between shareholders.

• Broader possibilities for electronic communication. Companies can include an e-mailadress and/or website in their Articles of Association and the shareholders can communicate an e-mailaddress via which they wish the company communicates.

With effect as of 1 January 2020, the CAC will thus have an important impact on your company and its functioning.

Finally, we want to remind you that all companies at the occasion of the first modification of their Articles of Association after 1 January 2020 immediately and entirely have to bring their Articles of Association in line with the CAC, unless the modification of the Articles of Association results from the application of the authorized capital, the exercise of subscription rights or the conversion of convertible bonds. In any case, the Articles of Association have to be amended by 1 January 2024 at the latest.

For more information you can always contact us via davy.smet@cotra.law or kurt.faes@cotra.law.

A lot of companies have ended their financial year on December 31, 2017 and are currently working on the closing of the financial year, the audit by the statutory auditor, the drafting of the annual accounts and the annual report so the annual shareholders’ meeting can decide on the approval of the annual accounts in a timely manner later this year.

The annual accounts have to be presented to the annual shareholders’ meeting for its approval at the latest within six months following the end of the financial year.  Subsequently, the directors have to file the approved annual accounts with the National Bank within 30 days following the approval. So at the latest seven months following the end of the financial year, the annual accounts have to be filed with the National Bank.

In case the annual accounts are not filed with the National Bank within the abovementioned deadlines, this may result in the following consequences:

• Increase of the filing fees

If the annual accounts are filed late with the National Bank, an increase of the filing fees will be applicable. Depending on the circumstances, these can amount from 120 EUR to 1,200 EUR.

• Directors’ liability 

The late filing of the annual accounts with the National Bank is a violation of the Company Code and jeopardizes the liability of the directors towards the company and third parties. If the annual accounts are not filed in a timely manner, the damages to third parties are assumed to result from this late filing without the need to proof a causal relationship. The directors can however try to provide evidence of the contrary.

• Judicial liquidation of dormant companies

If the company has not filed its annual accounts in a timely manner, each interested party (for example a customer or competitor), the public prosecutor and the chamber of commercial investigation can introduce a claim for judicial liquidation of the company. Since May 2017, this claim for liquidation can already be introduced if the annual accounts have not been filed in a timely manner once. Contrary to the past when the claim for judicial liquidation could only be introduced if the annual accounts had not been filed during three consecutive years.

Depending on who introduced the claim for liquidation, the court can or may be obliged to grant a rectification period to the company.

The late filing of the annual accounts with the National Bank can have important consequences and therefore it is best to avoid this situation.

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Importance of a timely filing of the annual accounts

Belang van een tijdige neerlegging van de jaarrekening