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

Management of the Private Limited Company (BV - SRL)

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In this third contribution we will discuss the management of the private limited company, the limitation of its liability and the notion of day-to-day 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 Companies and Associations Code aims for the same terminology for the different types of companies since the notion of 'partner' was also replaced by 'shareholder'.

The Companies and Associations Code 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 Companies and Associations Code 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:

Maximum Amount Turnover Balance Sheet Total
€ 125,000 < € 350,000 And < € 175,000
€ 250,000 < € 700,000 And < € 350,000
€ 1,000,000 < € 9,000,000 Or > € 4,500,000
€ 3,000,000 € 9,000,000 – € 50,000,000 And € 4,500,000 - € 43,000,000
€ 12,000,000 > € 50,000,000 Of > € 43,000,000

 

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

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 Companies and Associations Code 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 Companies and Associations Code 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. 

Would you like to learn more about this subject?

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Leo Peeters

Leo Peeters

Partner
Koen De Puydt

Koen De Puydt

Partner
Alain De Jonge

Alain De Jonge

Partner
Toon Rummens

Toon Rummens

Partner
Leila Mstoian

Leila Mstoian

Partner
Maxiem Devos

Maxiem Devos

Senior Counsel