Belgium: Loyalty Shares For Belgian Listed Companies: Fundamental Change On The Way

In Short

The Background: On June 4, 2018, a draft law designed to substantially reform the Belgian Companies Code was submitted to the Belgian Parliament for review ("New Companies Code").

The Result: The New Companies Code seeks to enhance flexibility and competitiveness for Belgian companies, and notably introduces an optional double-voting right for loyal shareholders of listed companies.

Looking Ahead: Under the New Companies Code, existing listed companies could take advantage of this new double-voting right as of January 1, 2020, upon introducing loyalty shares into their articles of association.

On June 4, 2018, the Belgian Council of Ministers submitted to the Belgian Parliament a draft law designed to substantially reform the Belgian Companies Code in view of promoting greater flexibility and competitiveness for Belgian companies.

The New Companies Code envisages many changes, notably including enabling Belgian listed companies to grant double-voting rights to shareholders who have registered their shares for a period of at least two years. Such a fundamental move echoes the current European focus on long-term share ownership in listed companies. Other EU Member States, including France and Italy, have adopted similar regimes.

New Companies Code—Expected Timing

While the parliamentary review process for the New Companies Code is at an early stage, its targeted date of applicability is January 1, 2019, for any company incorporated from such date.

For existing companies, the mandatory provisions of the New Companies Code would be applicable as of January 1, 2020. The New Companies Code's full set of modifications, including its default provisions would apply as of the first date on which a company modifies its articles of association, but no later than January 1, 2024.

Existing companies seeking to benefit from the more flexible provisions of the New Companies Code as of 2019 may decide to opt-in earlier by modifying their articles of association to comply with the New Companies Code.

Loyalty Shares for Listed Companies—A New Regime for Multiple Voting Rights

A prohibition on multiple voting rights has existed in Belgium since 1934 (excluding cooperative companies). This means that one share equals one vote. The New Companies Code would waive this prohibition for both listed and nonlisted companies that opt for multiple voting rights. The one share/one vote rule would become the default rule only.

Nonlisted companies may bypass the proportionality principle and issue multiple voting rights without a multiplier limit.

For listed companies, the New Companies Code will introduce an optional double-voting right mirroring the French Company law regime ("Loi Florange"), which limits the multiplier to two and thereby eases potential imbalances between capital and voting power. However, in France, the double-voting right automatically applies by law unless specifically prohibited by the articles of association. By contrast, Belgium takes a more cautious approach, such that double-voting rights would be permitted only upon express authorization by the shareholders through an amendment to the articles of association.

The New Companies Code would allow articles of association to grant a double-voting right to reward "loyal" shareholders, namely those shareholders who have held such shares in registered form for an uninterrupted period of at least two years. This period begins to run from the date of registration in the shareholders' register, even if the company was not yet listed at that time or if the double-voting right regime was not yet applicable.

The double-voting right principle must be explicitly introduced in the company's articles of association following a formal decision of the shareholders taken by a special majority of two-thirds of the votes present or represented (by contrast, ordinarily, amendments to the articles of association require a majority of 75 percent). In further derogation of the ordinary voting quorum, listed companies could implement the double-voting right principle with only a majority of 50 percent + one share, if the shareholders' meeting decision occurs between January 1, 2020, and June 30, 2020. Therefore, listed companies must not overlook that this major change in voting rights would be easier to introduce during this time-window immediately following the reform. In an additional step to soften quorum requirements, an abstention would no longer be counted as a negative vote for the purpose of calculating the voting quorum.

The double-voting right would be lost in the event of a transfer of shares or a conversion of registered shares into dematerialized shares. However, it would be maintained if the transfer took place between companies under common control or between a company and its controlling shareholder, or in the event of inheritance, merger, or demerger.

Impact on Belgium's Takeover Law and Transparency Law

The Belgian law of May 2, 2007, on the disclosure of major shareholdings in listed companies ("Transparency Law") would not be amended to take into account the application of the loyalty shares and double-voting right mechanism. This implies that holders of registered shares in Belgian listed companies would need to monitor closely the amount of their holdings to assess whether the effects of the loyalty shares mechanism would require notifying a significant shareholding following the attainment of the transparency threshold.

By contrast, the Belgian law of April 1, 2007, on public takeovers ("Takeover Law") would be amended to "neutralize" the effects of the loyalty shares and double-voting right mechanism. Shareholders who surpass the 30 percent threshold of voting rights in a listed company, due to the double-voting right, would not be required to launch a mandatory takeover bid on the listed company in which they hold shares. Along the same lines, the acquisition of shares benefiting from the loyalty shares mechanism (representing more than 30 percent of the voting rights in a listed company, due to the double-voting right) would not trigger such obligation to launch a mandatory takeover bid, since the benefit of the double-voting rights would be lost due to such transfer of shares.

Three Key Takeaways

  1. Soon, it may be possible for any Belgian listed company, by amending its articles of association, to grant a double-voting right to "loyal" shareholders who hold these shares for an uninterrupted period of at least two years in registered form.
  2. To encourage the introduction of a new such right, a two-thirds majority (instead of 75 percent) would suffice under the New Companies Code to introduce the double-voting mechanism by way of amending the articles of association. Furthermore, the required majority is even lowered to only 50 percent + one share during the interim period from January 1, 2020, to June 30, 2020.
  3. While the effect of introducing loyalty shares and double-voting rights is neutralized for the purposes of the Belgian Takeover Law, this significant shift in voting right powers will require shareholders of Belgian listed companies to monitor more closely their participation in such companies and to undertake, as needed, relevant transparency notifications for significant shareholdings.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions