In a previous contribution, you have already read when a company or association has to comply with the new Companies and Associations Code.
This is provided for in the transitional provisions of the Companies and Associations Code.
1. Mandatory provisions applicable as from 1 January 2020
The transitional provisions have the consequence, among other things, that the mandatory provisions of the CAC apply as from 1 January 2020, even if the companies and associations concerned have not yet amended their articles of association.
The provisions of the articles of association contrary to these mandatory provisions will be deemed not written as from this date. Other provisions of the CAC, on the other hand, apply only to the extent that they are not excluded by the articles of association.
The mandatory provisions also apply immediately to agreements, such as contractual restrictions on the free transferability of securities and agreements relating to the exercise of voting rights or bonds.
Although the transitional provisions explicitly refer to these "mandatory provisions", there is nowhere in the CAC or the law introducing the CAC, a clear list of these mandatory provisions.
The only reference that can be found in the CAC is the mention "notwhitstanding otherwise stipulated".
A non-exhaustive list of mandatory provisions can be found in the preparatory works:
- Article 1.5 lists the names and abbreviations of the legal entities that the CAC further accepts, excluding all other legal entities (more details here);
- Limited Liability Companies (BV-SRL) and Cooperative Companies (CV-SC) cease to be companies with share capital:
- The paid part of the BVBA-SPRL's capital and legal reserve and the paid-up part of the fixed share of the capital and the legal reserve of the CVBA-SCRL's are converted by law and without any formality, into "equity";
- The un-paid part of the share capital in the BVBA-SPRL and the un-paid part of the fixed part of the share capital in the CVBA-SCRL are similarly transformed into "equity" but accounted for as "non-called contributions";
- In the event of the release of the contributions, the amounts deposited are recorded as "equity" but made unavailable.
- Directors, members of the Supervisory Board and the Board of Directors can no longer exercise their mandate under an employment contract.
- The concept of day-to-day management is interpreted more widely (see here).
- The CAC indicates in detail what should happen in the event of a conflict of interest within the board of directors or in companies listed on the stock market with related individuals or legal entities.
- From 1 January 2020, BV-SRLs will only be able to make profit distributions by complying with certain tests (balance sheet test and liquidity test) imposed by the CAC (see here on this subject). If one of the two tests gives a negative result, the BV-SRL will have to observe the new alarm bell procedure.
The rules relating to the distribution of profits in the BV-SRL also have an impact on other forms of distribution (such as the acquisition of own shares or own certificates).
- Certain provisions in the event of resignation imputed to the assets of the BV-SRL and the CV-SC.
- Certain provisions relating to the acquisition of own shares, profit shares and certificates in the Limited Company (NV-SA).
- The general system of directors' liability.
- The invalidity of the decisions of the corporate bodies.
- The voting method in general shareholdersmeeting and in particular the neutralisation of abstentions.
The CAC, on the other hand, repeals a number of mandatory provisions, such as those relating to cross-shareholdings or bonds.
In addition, please do not forget that you will still have to adapt your articles of association in case they are adapted prior to 1 January 2020.
2. How can we help you?
Would you like to avoid unpleasant surprises on 1 January 2020? Or avoid rushing to the notaries during the first months of 2020?
It is strongly advised to already adapt your articles of association (and agreements in force) to the new CAC. Obviously our Seeds of Law team, specialised in corporate law, will be able to help you with this operation.
Do not hesitate to contact your contact person from our firm or via email@example.com and 32 (0) 2 747 40 07.
Would you like to learn more about this subject?
Contact our experts or telephone +32 (0)2 747 40 07