The Belgian Companies and Associations Code (the ‘BCAC’) entered into force 4 years ago, on 1 May 2019. The transition period is soon ending. By 31 December 2023, all companies that were incorporated before 1 May 2019 must have updated their articles of association.
| DEADLINE: 31 DECEMBER 2023
When the BCAC entered into force, existing companies were not obligated to immediately update their articles of association. However, on 1 January 2020, the provisions of the BCAC became applicable to all existing companies, regardless of whether their articles of association had been updated. Furthermore, at the occasion of any amendment of the articles of association of a company after this date, it was required to bring these in line with the BCAC.
Should a company not have updated its articles of association at this point in time, the ultimate deadline has been set to 31 December 2023. By then, the articles of association of all companies must be in line with the BCAC.
The mandatory update of the articles of association is the perfect opportunity to make us of the increased flexibility introduced by the (new) BCAC. The BCAC allows more fine-tuning of the articles of association to the parties’ wishes and needs e.g. in terms of voting rights, dividend rights, transfer of shares, management, etc.
The sanction for not updating a company’s articles of association by 31 December 2023 is twofold.
On the one hand, if the company’s legal form does not exist any longer, it will automatically be converted into the legal form closest to the old form. In case of automatic conversion, however, it is still required to bring the articles of association in line with the new legal form by 30 June 2024.
On the other hand, the company’s directors could be held liable for any damages the company and/or third parties suffer as a consequence of the non-updated articles of association. In other words, it is advisable not to wait and to update the company’s articles of association before the deadline passes.
| IN PRACTICE
There is no need to panic if your company’s articles of association have not been updated yet. Simont Braun can assist you in this process, from advising on the opportunities provided by the BCAC to coordination with the notary public. Do not hesitate to contact us should your company’s articles of association require an update.
This newsletter is not a legal advice or a legal opinion. You should seek advice from a legal counsel of your choice before acting upon any of the information in this newsletter.