1. Many shareholders’ agreements (and some articles of association) include exit mechanisms in the form of call and put options. In the case of unlisted companies, these agreements are conceived as a regulation of corporate relationships, and mainly focused on terminating the shareholdership without requiring the intervention of the court or a third party-transferee. Financial investors, for instance, often negotiate for themselves a put option so that they will be able after a given period of time to valorize their investment, potentially at a guaranteed minimum price. Agreements between or with operationally active shareholders also often include options which, according…
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Online and remote incorporation of companies and other legal entities On 15 July 2021, the Company Law Digitalisation Act[1] was published in the Belgian Official Gazette. This new act transposes the Directive (EU) 2019/1151 of 20 June 2019[2], which is part of the wider digitalisation process promoted by the European Union. This act is a new step towards the digitalisation and modernisation of company law. After the introduction of the digital mandate allowing to remotely sign and execute authentic deeds such as deeds of amendment to the articles of association, and following the implementation of the articles of association database…
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After some delay, the new Pledge Act finally came into force on 1 January 2018[1]. This new legal framework introduced the ‘registered pledge’. This kind of pledge becomes valid and opposable without requiring a dispossession. This implies that the pledgor can remain in possession of the pledged goods. To make this pledge opposable to third parties, it needs to be registered in the ‘national pledge registry’ that has been set up for that purpose (https://pangafin.belgium.be/#?lang=NL). The pledge registry is publicly accessible: any person who holds a Belgian electronic identity card is able to conduct searches in the pledge registry. Every…
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A director is expected to be “loyal” to the company in which he exercises his mandate. The duty of loyalty of directors[1] emanates from the general ‘good faith’ principle in contract law, which states that agreements must be executed in good faith. It is accepted that this loyalty implies a non-competition obligation, which means that the director is not allowed to exercise activities during the term of his mandate that compete with the company’s (actual) business activities. He may not, for instance, set up a competing company, exercise a mandate or hold an operational position in a competing company, ……
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The need for legal alternatives to physical attendance at general meetings of companies or (international) non-profit organizations (“(I)VZW”), became more relevant than ever the past year. The Company’s Code, respectively the CCA, already included an array of options to address this problem even before it became an issue within the context of the Covid-19 crisis, some of these options only applicable to companies. The Law of 20 December 2020 (Belgian Official Gazette of 24 December 2020) on various temporary and structural provisions on justice in the context of the fight against the spread of the coronavirus COVID-19, introduces a certain…
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To limit the risk which is inherent to entrepreneurship, entrepreneurs can choose to conduct their business through the use of a company. Depending on the type of company, the shareholders can benefit from a limited liability. This implies that their loss, if any, will be limited (in principle) to the loss of their contribution in the company. Is it possible for a shareholder to go even further and even safeguard his contribution in the company? In other words, can he participate as a risk-free shareholder in the company? The most common strategy to create a risk-free participation makes use of…
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Common shares of which the membership rights are own. In case of spouses who are married under the legal regime with community of acquisitions, the professional income generated by each individual spouse is considered as community property. In this context, each spouse continues to have professional autonomy and can make his own professional choices, without the interference of the other spouse. To strengthen this professional autonomy, the 2018 reform of the matrimonial property law clarified and further developed the former rules provided for in article 1401,5° of the Civil Code regarding the membership rights of common shares. Today, the membership…
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If the seller of the shares is a natural person who is married, the question arises whether he/she can negotiate and sign the transfer agreement on his/her own, or needs to inform his/her spouse of the planned transaction and obtain the spouse’s consent to achieve a legally valid purchase/sale of shares. Both in the hypothesis that it concerns shares that, pursuant to the matrimonial property law, belong to the personal property of the seller (for instance, shares that the seller has acquired with his own money or through inheritance or donation), as well as in the hypothesis that it concerns…
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As set out in a former blog article (“Non-competition clause in acquisition agreements: a necessity?” – Matthias Jans, 14 April 2016 – see link), the buyer of shares who wants to prevent that the seller conducts competing activities after the transfer, must explicitly include a non-competition clause in the share purchase agreement. Pursuant to the French d’Allarde Decree of 1791, the freedom of trade and industry prevails. This principle is now included in Book II of the Code of Economic law, Title 3 (Freedom of enterprise). As a non-competition clause restricts this freedom, the parties have to consider a certain…
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In a former blog article, we pointed out the practical implications of the fact that the legislator, quite unfortunately, has linked the entry into force of the opt-in to the publication of such decision in the annexes of the Belgian Official Gazette and not to the actual time of the decision itself. In our opinion, it was not possible, after the ‘opt-in’ decision, to take other decisions by already applying the new CAC, and include them all in the same deed. We considered that the decisions other than the one related to the opt-in could only be taken applying the…
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