1. Legal Personality
A company has a legal personality separate from that of the shareholders as of the date of filing of the deed of incorporation with the Clerk's Office of the Commercial Court. This filing is handled by the Belgian notary who prepares and executes the deed of incorporation. The notary is required by law to file the deed of incorporation within two weeks.
A company may not enter into any transaction (e.g., purchase of assets, lease of premises) until it has a legal personality. It is, however, possible for one or several persons to carry out a transaction on behalf of a company prior to the moment when it acquires a legal personality (see Part 3 "Selected issues", item 4).
2. Shareholders' Liability
As a general rule, the parent company or the shareholders may not be held liable for the debts or transactions carried out by the company. Nevertheless, the corporate veil may be pierced in very exceptional circumstances, in particular if it can be established that the subsidiary is a fictitious company.
II. CAPITAL AND SHARES
1. Capital Requirement
The capital of a company must be entirely subscribed and may not amount to less than BEF 2,500,000. At least 25% of the par or nominal value of each share must be paid up upon issuance of the shares (either at the incorporation of the company or at a capital increase), with a minimum amount to be paid up on the date of incorporation of BEF 2,500,000.
Total amount of the capital Minimum amount to be paid up BEF 2,500,000 BEF 2,500,000 BEF 10,000,000 BEF 2,500,000 BEF 20,000,000 BEF 5,000,000 BEF 50,000,000 BEF 12,500,000The capital of a company is usually expressed in Belgian francs. It is, however, possible to express the capital in ECU or in the currency of a Member State of the O.E.C.D. (e.g., in USD), provided that the Belgian francs equivalent of the capital amounts to at least BEF 2,500,000.
2. Capital Contributions
Capital contributions may be made either in cash or in kind. Contributions in kind may consist in any asset with an economic value (e.g., real estate, shares in another company, a claim, etc.).
In case of a contribution in cash, the amount of the contribution to be paid up must be deposited in a blocked account prior to the execution of the deed of incorporation or of the deed of capital increase.
A contribution in kind requires an appraisal report by an auditor, as well as a report issued by the founding shareholders, or by the Board of Directors (in case of a capital increase).
3. Capital Increases and Reductions of Capital
As a general rule, a shareholders' resolution is required to increase the capital. The by-laws may, however, authorize the Board of Directors to increase the capital up to a certain amount, known as the authorized capital.
A resolution of the shareholders' meeting is always required to reduce the capital. The capital can be reduced, either in order to set off the company's losses against the capital, or to reimburse to the shareholders the par or nominal value of part of their shares. Specific rules intended to protect creditors' rights apply in the event of a reimbursement to the shareholders.
The decision to increase or reduce the capital must always be recorded in a notarial deed. The shareholders' meeting or, as the case may be, the Board meeting must therefore be held before a Belgian notary.
4. Types of Shares
The shares issued by a company may be either in bearer form (represented by bearer share certificates) or in registered form (consisting in an entry in a share register kept by the company). A company may also issue dematerialized shares consisting in an entry in the books of an approved financial institution.
Shares can be issued with or without par value.
In principle, all shares carry voting rights A company may, however, issue non-voting preferred shares representing up to 33% of the capital. The by-laws may also authorize the company to issue various classes of shares, including preferred shares with voting rights. The voting rights attached to common or preferred shares must always be in proportion to the amount of the capital represented by each share. Shares with the same value must therefore necessarily have equal voting rights. As a practical matter, all shares issued by most companies have the same value and they each carry one vote.
5. Share Transfers
As a general rule, shareholders may freely transfer all or part of their shares to another shareholder or to a third party. Share transfers may be restricted in the by-laws or in a shareholders' agreement, provided that such restrictions are limited in time and satisfy the company's corporate interest test. If share transfers are subject to approval (e.g., by the Board of Directors) or to a right of first refusal of the other shareholders, the procedure may not have as a result that share transfers are prohibited for more than six months.
The content of this article is intended to provide general information on the subject matter. It is not a substitute for specialist advice.
De Bandt, van Hecke & Lagae - Brussels (32-2) 501 94 11
