Companies beware: convert your company now before it is too late

Analyse

Company law has changed radically with the introduction of the Companies and Associations Code (CAC) in 2019 and effective 2020. The CAC has limited the number of company forms.

As a result, some company forms have disappeared. Existing companies must adapt themselves. This must be done before 1 January 2024.

Do not wait until the last moment!

All BVBA/SPRL (private limited liability companies), including the EBVBA (one-person BVBA/SPRL) and the start-up BVBA/SPRL, must be converted into a BV/SRL (private limited liability company). Cooperative companies that do not or no longer comply with the cooperative identity must also be converted. The BV/SRL qualifies for this type of company, but other forms are possible, as well.

The partnership limited by shares (Comm.V.A./SCA), the cooperative company with unlimited liability (CVOA/SCRI), the agriculture company and the partnerships (silent and temporary companies) disappeared on 1 January 2020. Such companies may still exist and are registered as such in the Crossroads Bank for Enterprises. But, these companies must also be converted.

1. What are the formalities to be completed to convert your company?

A conversion must take place by means of an amendment to the articles of association, either simultaneously with another amendment to the articles of association or, at the latest, before 1 January 2024 if the articles of association have not been amended by that date.

If the articles of association are not amended in time, the company, whose form has been discontinued, will automatically be converted into that legal form which matches the best with the old form. In some cases, such forced conversion could not be appropriate and could even lead to unpleasant situations.

But even with an automatic conversion, directors are not relieved from their duty to comply. As a director, you will have to take the initiative to amend the articles of association and to convene a general meeting within six months (by no later than 30 June 2024).

If you do not take these steps, you risk being held personally and jointly liable for all damages suffered by the company or third parties due to the failure to comply with this obligation.

2. Bringing your articles of association into line with the CAC

Existing companies that do not immediately need to be converted are also advised to bring their articles of association into line with the CAC.

As of 1 January 2020, all mandatory provisions of the CAC apply, even if the articles of association do not mention them. Moreover, the law stipulates that these mandatory provisions must be included in the articles of association.

Here too, the obligation to amend the articles of association must be complied with at the latest either as a result of an amendment to the articles of association or before 1 January 2024, if no amendment to the articles of association has been made before that date.

Of course, Seeds of Law will gladly assist you with such projects. Do not hesitate to contact us via +32 (0)2 747 40 07 or info@seeds.law.