Amendments to Belgian corporate law to facilitate remote shareholders’ meetings

Since the outbreak of the COVID-19 pandemic, the provisions of the Companies and Associations Code (the “CAC”) on the functioning of corporate bodies have proved to be too restrictive, particularly with regard to the remote organisation of shareholders’ meetings for listed companies or companies having many shareholders.

remote shareholders meetings - loi 20 décembre 2020 - belgium

Facilitating remote shareholders’ meetings

Following the Royal Decree No. 4 of 9 April 2020 (as extended by the Royal Decree of 28 April 2020) which has expired, the Law of 20 December 2020 has been adopted notably to facilitate the remote shareholders’ meetings of companies and (international) non-profit associations (A(I)SBL/(I)VZW) on a long-term basis.

In its current version, the CAC required a specific authorisation in the articles of association to organise a shareholders’ meeting using electronic means of communication. This requirement disappears with the newly adopted measures (for the SA/NV, see the new text of article 7:137 of the CAC).

For all companies (listed or not) and associations (“ASBL”/”VZW”), the option to hold a remote shareholders’ meeting is now at the discretion of the management body. However, the meeting will always need to be held at the same time in a “presential” form. Consequently, unlike what was provided for in the Royal Decree no. 4, directors may not refuse the physical presence of shareholders at the meeting.

Members of the bureau are required to participate in person. The directors and, where applicable, the statutory auditor can attend remotely provided they are able to answer the shareholders’ questions with the used communication means.

Conditions to organise remote shareholders’ meetings

Several conditions have to be met by companies and associations wishing to organise a remote shareholders’ meeting:

  • The entity must be able to verify the capacity and identity of its shareholders/members. The means used should be adapted to the shareholding/membership structure. The Parliamentary works list as examples: Teams, Zoom, Skype or a similar system.
  • The convening notice to the shareholders’ meeting must contain a clear and precise description of the procedure to participate remotely. If the company or the ASBL/VZW has a website, the procedure must be made accessible on it.
  • A “two-direction” communication is mandatory. Accordingly, shareholders or members must be able to directly, simultaneously and continuously follow discussions, exercise their voting rights, actively participate in the debates and ask questions. However, the new regulation allows for a one-way communication – not allowing shareholders or members to actively participate in the discussions – until 30 June 2021 provided it has valid reasons to do so which are justified in the convening notices. Shareholders or members who wish to actively participate in the discussions will then have to attend the meeting in person.

Our analysis

The Covid-19 outbreak has proved the importance to dispose of legal and technical resources to organise remote participation and voting to shareholders’ meetings. In addition, remote participation may encourage certain shareholders to participate in shareholders’ meetings. From this perspective, the adaptations made to the CAC are welcome.

However, contrarily to the measures taken during the first lockdown, the legislator did not leave a certain margin of appreciation to allow the management body to prohibit shareholders’ physical presence. Thus, shareholders’ meetings will, at most, remain hybrid meetings. This may be problematic if the social distancing measures are extended for several months, especially as the period for organising the shareholders’ meetings, notably for listed companies, is coming. One way to limit the number of shareholders present in person may be to encourage the granting of proxies to a single person suggested in the convening notices.

In addition to the amendments concerning remote meetings, the newly adopted measures extend to the members of an ASBL/VZW the possibility to (i) take unanimously and in writing all decisions which fall within the powers of the shareholders’ meeting, except for the amendment of the articles of association and (ii) to vote at a distance before the shareholders’ meeting by way of electronic means if the articles allow it.

The amendments summarised above entered into force on 24 December 2020.

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For additional information or guidance, please contact Sandrine Hirsch or Nikita Tissot

sandrine.hirsch@simontbraun.eu
nikita.tissot@simontbraun.eu
+32 (0)2 543 70 80

Simont Braun advises the shareholders of Sopura on its sale to Kersia

Simont Braun successfully assisted the shareholders of the Belgian group Sopura, a world leader in cleaning solutions for the food and beverages industries and more particularly for brewers, in its sale to the French group Kersia, the reference in food safety worldwide.

Established in 1946, Sopura is a Belgian family-owned group with a global reach and presence in over 100 countries, with 15 subsidiaries and 5 production sites. It has become a reference in the production and sales of chemicals and their applications in cleaning, sanitizing and water treatment processes for the brewery, beverage and food industry. Its acquisition by Kersia is part of the latter’s wide expansion strategy started in 2016 and will foster its presence in the beverage market.

Simont Braun has assisted the client in all legal aspects of this cross-border transaction alongside the financial advisor Deloitte Financial Advisory (Belgium).

The Simont Braun team was led by partner Sandrine Hirsch, with the assistance of senior associate Thomas Selvais.

For any question, please contact Sandrine Hirsch: sandrine.hirsch@simontbraun.eu – +32 (0)2 533 17 64

This deal has been reported in L’Echo. The article authored by Simon Souris is available here.

The electronic signature: which validity?

With the COVID-19 crisis and the rise of teleworking, certain practices have evolved as the use of electronic signatures, which may soon become the rule rather than the exception. In practice, it is not always clear which documents can be signed electronically, which type of electronic signature should be used and what is its legal value. This news addresses the legal and practical aspects of the e-signature.

Legal provisions applicable

Article 1322, subpara. 2, of the Civil Code, provides that “a signature may be required for the application of this article for a set of electronic data that can be attributed to a specific person and that establishes the maintenance of the integrity of the content of the act”.

Regulation (EU) No 910/2014 on electronic identification and trust services for electronic transactions in the internal market (eIDAS Regulation) provides that:
1. An electronic signature shall not be denied legal effect and admissibility as evidence in legal proceedings solely on the grounds that it is in an electronic form or that it does not meet the requirements for qualified electronic signatures.
2. A qualified electronic signature shall have the equivalent legal effect of a handwritten signature.
3. A qualified electronic signature based on a qualified certificate issued in one Member State shall be recognised as a qualified electronic signature in all other Member States.” (art. 25 of the eIDAS Regulation).

Different types of electronic signatures

There are three types of electronic signatures, classified according to their level of security.

The basic electronic signature

This signature consists of “data in electronic form which is attached to or logically associated with other data in electronic form and which is used by the signatory to sign” (art. 3.10 of the eIDAS Regulation). In practice, it can be a scan of a signature integrated into an electronic document, a ticked box on a website, a signature on a delivery man’s terminal, etc.

The signatory will have to establish, if the validity of his/her signature is disputed, that (i) it is attributable to him/her and (ii) the integrity of the content of the signed document is guaranteed (art. 1322, subpara. 2 Civil Code). This second condition, which is controversial, is doomed to disappear with the new Book 8 of the Civil Code, which will come into force on 1 November 2020.

The advanced electronic signature

An advanced electronic signature meets the following requirements:
(a) it is uniquely linked to the signatory;
(b) it is capable of identifying the signatory;
(c) it is created using electronic signature creation data that the signatory can, with a high level of confidence, use under his sole control; and
(d) it is linked to the data signed therewith in such a way that any subsequent change in the data is detectable.” (article 3.12 and article 26 of the eIDAS Regulation).

How – by means of which technological solution – the four requirements are complied with, is irrelevant for the legislator. As a result, service providers such as DocuSign, GlobalSign, Yousign, etc. have developed various processes to verify the signatory’s identity and the integrity of the signature to offer advanced electronic signatures.

Even if advanced electronic signatures are not assimilated to handwritten signatures by article 25.2 of the eIDAS Regulation, they rely on more elaborate verification processes which in principle meet the requirements of article 1322, subpara. 2 of the Civil Code. Therefore, they will be used for documents with high financial and legal stakes, and each time the law so requires.

The qualified electronic signature

A qualified electronic signature is an advanced electronic signature that (i) is created by a qualified electronic signature creation device (see requirements of Annex II of the eIDAS Regulation) and (ii) is based on a qualified electronic signature certificate that links the signature to the signatory’s identity (see requirements of Annex I of the eIDAS Regulation) (article 3.11 of the eIDAS Regulation).

A qualified signature is assimilated to a handwritten signature (art. 25.2 of the eIDAS Regulation) and has the same legal value. A qualified signature recognised as such in an EU Member State shall be recognised with the same legal value in all EU Member States.

In Belgium, a signature created with an identity card will be considered as a qualified electronic signature (to find out how to sign a document using your electronic identity card, see here). An EU Trusted List also gathers all trust service providers able to provide qualified signatures in Belgium (see the list here).

Itsme and GlobalSign have been accredited as such qualified trust service providers.

Requirement of multiple originals

Article 1325 of the Civil Code, which does not apply to B2B contracts, states that: “private deeds containing synallagmatic agreements are valid only to the extent that they have been made in as many originals as there are parties with a distinct interest”. Given the obvious difficulty of satisfying this condition with digital contracts, article XII.15 of the Code of Economic Law provides that “any legal or regulatory requirement of form relating to the contractual process shall be deemed to be satisfied in respect of a contract by electronic means where the functional qualities of that requirement are preserved”.

Therefore, the formality of “multiple originals” is met when a document is digitally signed by all the parties, for which any modification of the content of the act requires the joint action of each of them.
Since it is not a matter of public order, the parties can also contractually exclude the application of article 1325 of the Civil Code.

In practice

Acts under private signature

Private agreements can be validly concluded by means of an electronic signature.

All types of signature are valid, provided that the conditions of article 1322, subpara. 2 of the Civil Code are met for unqualified signatures. In practice, disputes as to the probative value of an unqualified electronic signature are rare. The type of signature will, therefore, certainly depend on the importance of the document to sign.

Notarial deeds

Article 1317 of the Civil Code states that notarial deeds can be received in dematerialised form, in which case a qualified electronic signature will be admitted.

In practice, the electronic signature of these deeds implies the establishment of a database of notarial deeds (NABAN), which has not yet been implemented.

Corporate documents

Documents drawn up for the management of legal entities (such as minutes) may be signed electronically by ordinary, advanced or qualified signatures.

The Companies and Associations Code expressly provides for the use of the ordinary or qualified electronic signatures for remote and proxy voting (art. 7:143 and 7:146).

The choice of the type of signature will depend on the importance and the nature of the decision taken by the corporate body.

Conclusion

According to the principle of non-discrimination in article 25.1 of the eIDAS Regulation, an electronic signature cannot be disregarded solely on the ground that it is an electronic signature. The author of a qualified signature will be assimilated to the author of a handwritten signature, whereas the author of an ordinary or advanced signature will have to convince the judge of the meeting of the conditions of article 1322, subparagraph 2 of the Civil Code.

In practice, all documents can be signed electronically but the type of e-signature must be adapted to the issues involved.

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For any question on this subject, please contact Sandrine Hirsch or Axel Maeterlinck
sandrine.hirsch@simontbraun.eu | +32 (0)2 533 17 64
axel.maeterlinck@simontbraun.eu | +32 (0)2 533 17 64

Update 29 April – Exceptional measures facilitating the functioning of corporate bodies in Belgium

Update 29 April

Regulatory framework

1. Following the outbreak of the COVID-19 pandemic, a number of corporate entities are facing difficulty to organise their ordinary shareholders meetings and the meetings of their management bodies.

Many companies have also decided to hold extraordinary shareholders meeting to adapt their articles of association to the provisions of the new Companies and Associations Code (hereinafter, the “CAC”) this year at the same time as their ordinary shareholders meeting.

2. In response thereto, the Belgian Government has adopted a special Royal Decree[1] (hereinafter, the “Royal Decree”), providing flexible short-term solutions, which are optional, for the organisation of their corporate meetings derogating to different provisions of the CAC.

Entities concerned

3. All forms of companies, non-profit organisations, contractual collective investment undertakings and legal entities governed by public law may use the possibilities introduced by the Royal Decree, as summarized below.

4. This news will focus on the application thereof to companies and will not address the specificities applicable to the other entities concerned by the Royal Decree..

Board of directors: written proceedings and telecommunication

5. The board of directors may, in all circumstances, decide unanimously in writing, notwithstanding any restrictions in the articles of association.

In addition, any meeting of the board of directors may be held by means of telecommunication techniques allowing joint deliberation, such as telephone or video conferences.

Shareholders meetings: remote meeting or postponement


1.     Remote meeting

6. Companies may require shareholders to exercise their voting rights exclusively :

  • by voting remotely using a form made available by the board of directors or via a website, in accordance with the provisions of the CAC; and
  • by giving a proxy to another person prior to the shareholders meeting. The board of directors may appoint one person that may act as proxy. This person can validly represent a shareholder upon receipt of specific voting instructions for each item on the agenda.

7. The voting form and/or proxy may be forwarded to the company by any means, including e-mails and scans.

8. For listed companies, these documents should reach the company at the latest on the fourth day prior to the date of the shareholders meeting. Other companies may impose the same time limit.

9. The company may limit the number of participants to the bureau of the meeting (if any), the members of the board of directors, the auditor and the proxyholder. The meeting may be held by conference call or video conference. It is not required in such case that the Company extend such solution to the participation to shareholders or other persons having the right to participate to the shareholders meeting, if the Company cannot guarantee compliance with the COVID-19 measures applicable at the time of the meeting.

10. Companies may require the shareholders to submit their questions in writing, and request them to do so at the latest the fourth day prior to the meeting. In such a case the board must answer to the questions submitted by the shareholders either in writing at the latest on the day of the shareholders meeting (before the vote) or during the shareholders meeting if its shareholders are allowed to follow the meeting live or in recorded form (webcam, conference call, etc.). Listed companies that opt for answers in writing should publish these on their website. Other companies may inform their shareholders by any other means, ensuring that their shareholders are reasonably able to take note of the answers.

11. For the rest, the modalities for convening remain generally applicable.

12. Companies that would have already convened their shareholders meeting may amend the convening notice without having to fulfil all formalities required by the CAC:

  • For listed companies: by means of a press release and on the company’s website no later than the sixth day prior to the date of the meeting already convened.
  • For other legal entities: by the most appropriate means.


2.     Postponement of shareholders meeting

13. The board of directors may decide to postpone the annual shareholders meeting and any other shareholders meeting, even if they have already been convened. This is not allowed for meetings convened in application of the warning bell procedure (“sonnette d’alarme/ alarmbel”), meetings convened at the request of the statutory auditor or meetings convened at the request of shareholders.

14. The postponement must be announced:

  • For listed companies: by means of a press release and on the company’s website no later than the fourth day prior to the date of the scheduled meeting. .
  • For other legal entities: by the most appropriate means.

15. In the event the board decides to postpone the shareholders meeting, all formalities must be complied with for convening the new shareholders meeting.

16. The dates for the approval, the submission of the annual accounts or where applicable, publication of the financial report have been extended with 10 weeks following the deadlines provided by the CAC or by the Royal Decree of the 14 November 2007.

Companies whose financial year ends on 31 December 2019 could therefore approve the annual accounts until 8 September and have until 8 October to file the annual accounts with the National Bank of Belgium.


3.     Video- and teleconference

17. Companies can also decide to hold a general meeting by video or teleconference in accordance with the CAC, even if this is not provided by the articles of association.. In such case, the general principles for general meetings remain applicable and procedures for deliberation, questions and voting should be put in place.


4. Written proceedings

18. It should be reminded that decisions of the shareholders meeting may be taken unanimously in writing in accordance with the CAC, except if such possibility is excluded by the articles of association. This may be done for companies with a small number of shareholders.

Notarial deed

19. For resolutions which require a notarial deed, the Royal Decree provides that only one director or any other person appointed by the board of directors should appear before the notary in person.

Entry into force – duration

20. The measures enter into force retroactively as from March 1, 2020 and will be applicable until June 30, 2020. 

21. The measures may also be applied for meetings that are convened before June 30 but which are to be held after such date.


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For any question, please contact the authors:

Sandrine Hirsch  |  sandrine.hirsch@simontbraun.eu
Tine Bauwens  |  tine.bauwens@simontbraun.eu
Nikita Tissot nikita.tissot@simontbraun.eu
Maxime Born  |  maxime.born@simontbraun.eu

 

[1]Arrêté royal n° 4 du 9 avril 2020 portant des dispositions diverses en matière de copropriété et de droit des sociétés et des associations dans le cadre de la lutte contre la pandémie Covid-19. Koninklijk besluit nr. 4 van 9 april 2020 houdende diverse bepalingen inzake mede-eigendom en het vennootschaps- en verenigingsrecht in het kader van de strijd tegen de Covid-19 pandemic. – The Royal Decree of 28 April 2020 has extended the measures provided in the Royal Decree of 9 April 2020 until 30 June 2020.

Covid-19 | Exceptional measures for listed companies

As you know, exceptional measures are now facilitating the functioning of corporate bodies in Belgium (see our previous news here).

But what about listed companies?

The FSMA has published a Q&A focusing on their specific obligations. The Q&A is available in French here and in Dutch here.

For any question, do not hesitate to contact our Corporate team.

Simont Braun successfully assists Bank Degroof Petercam in a wealth management dispute

Béatrice Thieffry, Sandrine Hirsch and Rafaël Jafferali were mentioned in L’Echo for successfully assisting Bank Degroof Petercam before the Brussels Court of Appeal in a wealth management dispute.

The full article is available here.

Source: L’Echo – Nicolas Keszei – 10 October 2019

This article has been reproduced with the consent of the editor, all rights reserved. Any further use must be specifically authorised by the rights management company Copiepresse: info@copiepresse.be 

 

UBO Register – Updated guidelines published on 19 July 2019

On 19 July 2019, the Federal Public Service of Finance published a new version of its FAQ on the register of Ultimate Beneficial Owners (UBO Register). The previous update was made on 2 April 2019. In addition to answering some technical issues, the newly updated FAQ mainly provides clarification for listed companies, associations and foundations, formalities of requests for derogations and declarations of spouses. The deadline of 30 September 2019 is maintained.

1. Deadline

The deadline for registration of the ultimate beneficial owners (UBO’s) is maintained. The information on the UBO’s must be transmitted to the UBO Register by 30 September 2019 at the latest.

Thereafter, all modifications must be recorded within a one-month period.

2. Exemption for listed companies

Companies do not have an obligation to register their beneficial owners if they are listed on a regulated market subject to disclosure requirements consistent with EU law or subject to equivalent international standards which ensure adequate transparency of ownership information.

The updated FAQ thus now provides for an exemption for listed companies, in line with article 3 § 6 of the EU 4th Anti-money laundering directive and with its implementation by other EU countries.

3. Non-profit associations and foundations

A. Natural persons in whose interest the entity was founded or operates

Associations and foundations also have to transmit information on the (categories) of natural persons in whose main interest the entity was founded or operates.

The FAQ clarifies that general target groups can be registered. A reference to the articles of association may be sufficient.

B. Any other natural person that otherwise exercises the ultimate control over the entity

Where applicable – as a residual category –, associations and foundations also have to submit information on any other natural person that otherwise exercises the ultimate control over the entity.

This only concerns persons who do not fall within one of the other categories of beneficial owners such as natural persons having the authority to represent the entity, but whose capacity has not been published, or members acting in concert.

4. Formalities for derogation requests

The updated FAQ clarifies some aspects of the formalities for requesting a derogation to the access by the general public to the information concerning a UBO.

The request may be filed either by the UBO (or a duly appointed proxyholder) or by the legal representative of the relevant entity when it makes the registration.

A request for a derogation for exposure to disproportionate risk, risk of fraud, kidnapping, blackmail, extortion, harassment, violence or intimidation must be accompanied by supporting documents, such as:

  • A reasoned derogation of another country with a similar register
  • A conclusion of a risk analysis report of an independent third party
  • A complaint filed with the police, a conviction or judgement, protective police measures
  • Any other document evidencing one of the abovementioned risks.

In case of a negative decision, legal action may be initiated before the Council of State.

For minors, the derogation automatically granted will last until they reach majority.

5. Declaration of spouses

The updated FAQ sets out guidelines for UBO declarations of spouses.

For interests falling within the marital community, the UBO will, in principle, be the spouse mentioned in the share register of the company or which exercises the voting rights. If both spouses do it jointly, they must be jointly registered with an equal number of shares or voting rights.

In other cases, one should analyse which spouse exercises in practice control over the entity.

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The updated FAQ document is available on the website of the Federal Public Service of Finance.

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For any question, please contact the authors: Sandrine Hirsch and Tine Bauwens.

The new Code of Companies and Associations enters into force as from tomorrow

The new Code, which was published in the Official Journal on 4 April 2019, will gradually come into force as from tomorrow.

The date of entry into force of the new Code is 1 May 2019. As from this date, each newly incorporated entity will have to comply with all the provisions of the new Code.

For existing companies and associations, the general rule is that the new Code will come into force on 1 January 2020, with a final deadline for adapting the articles of association on 1 January 2024. However, existing entities may choose an early opt-in and thus, through an amendment to their articles of associations, render the new Code fully applicable as from 1 May 2019.

Also to note: the Royal Decree dated 29 April 2019 implementing the new Code has been published today. This Royal Decree merges into a single text the regulatory provisions of various existing Royal Decrees. It contains nine books and is available here.

For any query, do not hesitate to contact a member of our corporate team.

UBO Register – Important updates in the FAQ document

An important update of the UBO Register FAQ document has been published by the Federal Public Service Finance on 2 April 2019. It provides a number of clarifications on the scope of the regulations, notably with respect to the notion of senior managing official, the situation in case of a usufruct / bare ownership, co-ownership, shareholders’ agreements… It also confirms that UBOs will have the right to know who consults their data. The updated FAQ document is available here: http://bit.ly/QandA-ubo

For any question, please contact Sandrine Hirsch or Nikita Tissot.

The final text of the new Companies Code has been published

Today has been published the Law of 23 March 2019 introducing the Code of companies and associations and amending certain other regulations (notably the Law on takeover bids). The final text is now available here.

For any assistance, please contact Sandrine Hirsch or Nikita Tissot.