Online incorporation of companies and other legal entities & statutory mandate database

Online incorporation of companies and other legal entities & statutory mandate database

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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Pledge on shares - what to check in case of due diligence: the pledge registry or the share register of the company?

Pledge on shares – what to check in case of due diligence: the pledge registry or the share register of the company?

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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How far does loyalty go? Can a director compete with the company, during his mandate or after the termination thereof?

How far does loyalty go? Can a director compete with the company, during his mandate or after the termination thereof?

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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Out of sight, but not out of mind: alternatives to physical attendance at general meetings

Out of sight, but not out of mind: alternatives to physical attendance at general meetings

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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The leonine clause in the CCA - risk-free shareholdership henceforth possible

The leonine clause in the CCA – risk-free shareholdership henceforth possible

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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Reform of the matrimonial property law: implications for the spouse who is professionnaly active through a company

Reform of the matrimonial property law: implications for the spouse who is professionnaly active through a company

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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Does the spouse of the seller of shares have to consent to the planned transaction?

Does the spouse of the seller of shares have to consent to the planned transaction?

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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Conditions for validity of non-competition clauses in share purchase agreements and mitigation power of the court

Conditions for validity of non-competition clauses in share purchase agreements and mitigation power of the court

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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Update: reply to parliamentary question about the opt-in: the EGM having decided to opt-in, can immediately take other decisions applying the CAC

Update: reply to parliamentary question about the opt-in: the EGM having decided to opt-in, can immediately take other decisions applying the CAC

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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Update: tolerance period until 31 December 2019 for the mandatory registration of the ultimate beneficial owner(s) of enterprises

Update: tolerance period until 31 December 2019 for the mandatory registration of the ultimate beneficial owner(s) of enterprises

In our blog post of 21 December 2018, updated by our blog post of 2 April 2019, we informed you about the legally required transparency as to the ultimate beneficial owners of enterprises, by means of registration in the so-called UBO-register. According to the royal Decree of 30 July 2018, the information concerning the ultimate beneficial owners of the enterprise had to be registered for the first time at the latest on 30 November 2018. The FPS Finance however allowed to postpone the registration until 30 September 2019. Meanwhile, the FPS Finance announced a tolerance period until 31 December 2019….


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