Update 29 April
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 (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.
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.
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:
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.
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.
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.
The updated FAQ document is available on the website of the Federal Public Service of Finance.
Simont Braun has advised Rewe, the second largest German supermarket chain, on the Belgian legal aspects of the purchase of Lekkerland/Conway, a major wholesaler specialised in consumption on the go, supplying gas stations, kiosks, convenience stores, etc. The transaction was signed on 28 May 2019 and the parties are now waiting for clearance by the competition authorities.
As both Rewe Group and Lekkerland are active in several European countries, their merger implied substantial cross-border aspects and the active cooperation of several top tier law firms, principally in Germany (lead), Belgium, Switzerland, the Netherlands and Spain.
Simont Braun’s Corporate M&A team advised Rewe on the Belgian legal aspects of the transaction, in particular by carrying out a legal due diligence on the Belgian target companies and assisted on the related legal and regulatory questions surrounding the transaction.
“Our team is delighted to have contributed to such a landmark European cross-border transaction, in close cooperation with Taylor Wessing Germany (lead firm). Our demonstrated capabilities to act in the framework of international transactions make us a go-to law firm for such matters on the Belgian market. Our integrated multidisciplinary structure and strong linguistic skills were clearly a plus,” highlights Axel Maeterlinck, partner in Simont Braun’s Corporate M&A department.
The Rewe Group generated a turnover over € 61 billion last year, courtesy of its 360,000 employees in 22 European countries. With the merger with Lekkerland, a new European powerhouse is born in the convenience segment. Lekkerland has about 4,900 employees in Europe and generated a turnover of € 12.4 billion euro last financial year. In Belgium, the group operates under the name Conway and its 400 people generate a turnover of € 1.5 billion (source: www.retaildetail.be).
The Simont Braun team was led by partner Axel Maeterlinck, together with partners Fernand de Visscher, Steven Callens and the assistance of counsel Pierre Van Achter and associates Tine Bauwens, Laura Grauer, Julie Kever and Peter Blomme.