1. No governmental control

As a general rule, no filing with, or approval from, any governmental authority in Belgium is required prior to the incorporation of a company. However, in order to be allowed to engage in certain activities, the company might be required to obtain the prior approval of governmental authorities (e.g., banking activities, insurance, pharmaceuticals, etc.).

2. Notarial deed

The deed of incorporation must be recorded in a deed prepared and executed by a Belgian notary.

The deed of incorporation must state the details (name and address) of the shareholders who incorporate the company and specify the amount of the capital contribution made by each shareholder. It also includes the by-laws of the company which determine the rules governing the company.

3. Shareholders

A company must be incorporated by at least two persons. These may be natural persons or companies.

All shareholders must be either present or represented at the meeting with the notary for the incorporation of the company. The shareholders may give a power of attorney to any person of their choice to represent them at this meeting. This power of attorney must contain a range of information on the new company (name, registered office, purpose clause, capital, etc.). It need not be notarized or legalized, unless the shareholder contributes a real estate property to the company.

The deed of incorporation may determine that one or more shareholders holding together at least 33% of the capital will be considered as "founding shareholders" and that the other shareholders will be considered as mere subscribers. This is of paramount importance as the Belgian Company Laws contain specific rules on the liability of the founding shareholders which do not apply to subscribers.

4. Capital contributions

Capital contributions may be made either in cash or in kind.

In case of a contribution in cash, each shareholder must deposit the amount to be paid up on his shares in a blocked account, prior to the execution of the deed of incorporation. This bank account must be opened in the name of the company "in the process of being incorporated" with a bank in Belgium. The bank will deliver a certificate to the notary confirming that the paid up amount of the capital is in the account and that this amount shall remain blocked until such time as the bank has received (a) a certificate from the notary confirming that the company has been incorporated and (b) satisfactory evidence that the deed of incorporation has been filed and that the company has therefore acquired a legal personality.

The shareholders may also make a contribution in kind to the company, consisting in assets other than cash, provided that such assets have an economic value (e.g., real estate, shares in another company, a claim against a third party debtor, etc.). In such a case, an appraisal report must be issued by an auditor. This report must certify that the value of the assets, as determined by the founding shareholders, is at least equal to the nominal or par value of the shares issued by the company in exchange for the asset contribution. In addition, the founding shareholders must prepare a report stating the reasons why the asset contribution is in the interest of the company and, as the case may be, the reasons why they do not agree with the findings of the auditor's report. Both reports must be delivered to the notary on the date of execution of the deed of incorporation.

5. Budget forecast

A budget forecast for the first two years of operations must be delivered to the notary on the date of execution of the deed of incorporation. This document will be kept by the notary and will not be filed or published. However, the notary might be required to release the budget forecast to the court, in case the company would become bankrupt within a period of three years.

The purpose of the budget forecast is to allow the court to assess the liability of the founding shareholders in the event that the company would become bankrupt within three years, as the "founding shareholders" can be held liable for all or part of the company's liabilities when, in the court's opinion, the amount of the capital at the time of incorporation was grossly insufficient to cover the normal development of the proposed activities of the company for a period of at least two years.

The budget forecast must be signed by those who qualify as "founding shareholder(s)".

The content of this article is intended to provide general information on the subject matter. It is not a substitute for specialist advice.
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