Can a private practice still be run in the form of a “cooperative company”?

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With the Code of Companies and Associations, cooperatives (CV-SC) can only be established if they are based on a genuine cooperative goal. The cooperative is therefore in principle no longer eligible for running a private practice.

This is at the essence of the answer the Minister of Justice gave following a parliamentary question.

The Minister of Justice was asked whether a cooperative (CV-SC) as defined in the new Code of Companies and Associations can still be used for a private practice and what would be the consequence when the new conditions are not met on 1 January 2020.

1. The BV-SRL as the default corporate entity for private practitioners instead of the cooperative (CV-SC)

One of the goals of the Code of Companies and Associations was to restore the cooperative's original identity. From now on, all cooperatives (CV-SC) must connect with the cooperative ideas.

As a result, according to the Minister of Justice, the cooperative (CV-SC) is no longer eligible for a private practice.

In order to meet the needs and wishes of the private practitioners, the regulation of the BV-SRL has been modified. The flexible system to withdraw as shareholder that characterizes the cooperative is now also possible in the BV-SRL.

Private practice - Seeds of Law

Professional companies can therefore be created under the legal form of the BV-SRL and exploit the new possibilities offered by this company form.

This does not change the fact that, in certain circumstances and, where applicable, in addition to their professional activities, private practitioners still can incorporate a CV-CS, but inspired by the cooperative goals.

2. Private practices as from 1 January 2020

Existing companies that do not meet the Code of Companies and Associations’ legal definition will remain governed by the former Companies Code until 1 January 2024 at the latest. If they have not converted into another legal form prior to 1 January 2024, they will be converted into a BV-SRL on that date by law.

But, as from 1 January 2020, the date on which the Code of Companies and Associations becomes applicable, all cooperatives (CV-SC) must comply with the mandatory provisions that apply to the BV-SRL. Provisions relating to the dispute resolution, the share capital of the company and the withdrawal of the shareholders are not included.

However, following the transitional provisions, CV-SCs existing on 1 May 2019 can only be penalised from 1 January 2024 if they do not comply with the mandatory provisions. Any cooperative society that does not fulfill the conditions determined by the law may therefore be dissolved by the court from that moment. It is sufficient for any shareholder, interested third party or the public prosecutor to request it.

For more information on the CV-SC in the context of the Companies and Associations Code, please click here or contact Seeds of Law, +32 (0) 2 747 40 07 or info@seeds.law.

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Leo Peeters

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Koen De Puydt

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Alain De Jonge

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Toon Rummens

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Toon Delie

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