- Leo Peeters - Toon Rummens - Alain De Jonge
- Code of Companies and Associations , CCA , capital , Director's liability , conflict of interest
As of 1 January 2020, the Code of Companies and Associations (CCA) comes into effect for companies and associations that already existed before 1 May 2019.
What are the consequences?
- All mandatory provisions of the CCA are automatically applicable to existing companies from 1 January 2020 (see our earlier article on the mandatory provisions);
- All provisions from the articles of association that are in conflict with these mandatory provisions will be deemed non written from 1 January 2020;
- The non-mandatory provisions of the CCA apply to the existing companies from 1 January 2020, insofar as their articles of association do not provide otherwise.
What do you have to pay attention to?
From now on there are seven company forms, among which four main forms are the partnership, the BV/SRL (private limited company), the NV/SA (public limited company) and the CV/SC (cooperative company), with the VOF/SNC (general partnership) and the Comm.V/SC (limited partnership) as two variants with legal personality for the partnership without legal personality.
All other forms of company disappear and will be integrated into the closest corresponding company form.
Please find below a brief explanation of the most important mandatory provisions:
1. The correct company form must be indicated
For example, all BVBA/SPRLs will now exist as BV/SRLs.
From now on it is preferable to indicate this new form on all your company documents, even if the articles of association have not yet been amended. However, no fines are provided. You can therefore use your pre-printed documents without any problem, and you can also adjust the advertising on your cars when the opportunity arises. But this does not alter the fact that it is necessary to provide a modification of the data as soon as possible.
2. The BV/SRL and CV/SC are no longer capital companies
The same applies to the concepts of minimum capital and capital protection.
Founders of a BV/SRL and CV/SC must ensure that there is "adequate starting equity". To this end, they must submit a financial plan that must comply with specific strict rules in terms of both content and form.
For existing BV/SRLs and CV/SCs, the fully paid-up part of the capital and the legal reserve is converted into a “unavailable statutory equity account". The part that is not fully paid up is converted into an asset account "uncalled contribution".
As a result, it is no longer possible to speak of a "capital reduction" but a "capital movement". In the event that the articles of association do not provide that the contribution may be paid out and is therefore unavailable, an amendment to the articles of association must be made before payment of a contribution can be made. In addition, for such payment, the double test must be performed, namely the net asset test (or balance sheet test) and the liquidity test (see point 3).
3. Double test on profit distribution
Because the provisions on capital protection are no longer applicable, it is no longer possible to distribute dividends.
Distributions of profits (dividend, redemption of contribution, shares redemption, payment on retirement or exclusion) can only take place after a double test, namely a balance sheet test whereby it is checked whether the net asset (equity) is sufficiently high for payment of a dividend; and a liquidity test in which it is checked whether the company holds sufficient liquid assets to pay its debts for the next twelve months.
It must be determined whether the company is able to pay its debts as they fall due over a period of at least 12 months. Must be taken into account developments that can reasonably be expected (cash flow, expectations, future investments).
This is important because the directors have a considerable responsibility in this regard.
4. Director's liability is limited
The directors’ (extra-)contractual liability is limited to a maximum amount (ceiling), to be determined in accordance with the size of the company (turnover and balance sheet total).
However, this limit only applies in the case of 'accidental minor error' and not in the case of repeated minor error, serious fault, fraudulent intent or intention to cause damage or in the case of unpaid social security contributions, VAT and withholding tax.
This sum can rise as high as EUR 125,000 to EUR 12 million.
5. Members of the management board must be self-employed
The directors, members of the management board can no longer work for the company through an employment contract.
6. Directors with a conflict of interest
Directors with a conflict of interest must abstain from deliberations and voting.
For more information on or assistance with this subject, contact Seeds of Law, Tel. +32 (0) 2 747 40 07 or e-mail firstname.lastname@example.org.