The Code of Companies and Associations - Part 2.3 – The Private Limited Company (BV – SRL) – Management

1. Director

As was already noted, the term 'business manager' in a private limited liability company (BVBA – SPRL) was replaced by 'director' in a private limited company. The Code of Companies and Associations aims for the same terminology for the different types of companies since the notion of 'partner' was also replaced by 'shareholder'.

The Code of Companies and Associations also provides for the possibility for directors to elect domicile at the legal entity’s registered office, and this for all matters regarding the holding of their office. As soon as the election of domicile is published in the Belgian Official Gazette, it may be invoked against third parties.

In that case, the director concerned may be written to (within the framework of the holding of his office) at the company’s registered office and no longer at his private address.

2. Limitation of Directors' Liability

One of the most important provisions of the Code of Companies and Associations is the legal limitation of the directors' liability.

Belgium thus becomes the first European country where the directors’ liability is limited to a maximum amount depending on the company’s turnover and balance sheet total, in particular:

However, the liability of a director cannot be further limited than what is provided for in the Code of Companies and Associations.

This liability limitation applies both to the company itself and to third parties, regardless of the (contractual or non-contractual) basis of the liability claim.

The maximum amounts also apply to all directors together. They apply to each fact separately or to a whole of facts that may give rise to liability, regardless of the number of claimants or claims.

However, the liability limitation does not apply: 

• In the event of a rather common than accidental minor fault,  major fault, fraudulent intent or intention to damage the person who is held liable;
• To obligations that have to do with the subscription and paying up of shares or a capital increase;
• To joint and several liability with regard to overdue withholding tax and VAT;
• To joint and several liability with regard to overdue social security contributions.

3. Day-to-day Management 

Just as in the public limited company (NV – SA), a body that deals with the company’s day-to-day management may also be set up in a private limited company.

The new Code of Companies and Associations also provides a legal definition of the notion of "day-to-day management".

The day-to-day management comprises acts and decisions that do not justify the intervention of the management body because they do not go beyond the company’s daily needs, or because they are of less importance or very urgent.

Once it has been published in the Belgian Official Gazette Belgisch to whom the day-to-day management is delegated and whether such persons may act each of them alone, jointly or as a collegial body, this may be invoked against third parties.

On the other hand, restrictions of the power of representation of the day-to-day management body cannot be invoked against third parties, even if they have been made public.

A more general article about the Code of Companies and Associations is available here. 

It goes without saying that we are happy to be at your disposal for any additional information or to assist you, info@seeds.law or +32 (0) 2 747 40 07.