Article 5:66 (besloten vennootschap or BV) and 7:77 (naamloze vennootschap or NV) of the Companies and Associations Code (CAC) provide for the joint and several liability of both the transferor and the transferee of non-fully paid up shares to pay up. This statutory provision is of mandatory law and does not allow the parties to contractually stipulate otherwise. The transferor is released from this joint and several liability only after five years have elapsed since the (opposability of the) transfer. If the transferor is held liable, he does have a recourse claim against the transferee (unless contractually stipulated otherwise). The…
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Just over a year after the entry into force of the Belgian Cooperation Agreement of 30 November 2022 establishing a foreign direct investment screening mechanism[1] , we see that in practice, too little attention is (still) being paid to the broad scope of those so-called Foreign Direct Investment (FDI) regulations. Under those regulations, certain transactions must be notified prior to their realisation. Involved parties or advisers are sometimes unaware of this and erroneously assume that the regulations in question only apply to “larger” transactions or those involving non-EU companies. However, this is without taking into account the broadly formulated scope…
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The Companies and Associations Code provides in Article 5:66 for private limited companies (“besloten vennootschap” or “BV”’) and Article 7:77 for public limited companies (“naamloze vennootschap” or “NV”) for the joint and several liability of both the transferor and the transferee for paying up not fully paid-up shares. This joint and several liability applies with regard to both the company (or the administrator (“curator”) in the event of bankruptcy) and to third parties (e.g. creditors). This legal provision is mandatory and does not allow parties to contractually determine otherwise. The transferor is only released from this joint and several liability…
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The intention of a party that stipulates a condition precedent (“opschortende voorwaarde”) is clear: he wants to make the exigibility of his commitment subject to certain facts or acts, of which it is still uncertain at the time of signature whether they will occur. Making a commitment subject to the fulfillment of one or more conditions precedent, is in principle valid. In a transaction practice, this technique allows to already proceed with the signing of the agreement – and bind the parties – although certain essential steps have not yet been taken. Just think of a buyer of shares who…
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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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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 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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Update: additional postponement of the mandatory transparency about the ultimate beneficial owner(s)
In our blog post of 21 December 2018 we informed you about the new 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 entreprise had to be registered for the first time at the latest on 30 November 2018. After a first postponement of the deadline, until 31 March 2019, the FPS Finance announced that entreprises are allowed to postpone the registration until 30 September 2019. This blog post has been…
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The new legally required transparency as to the ultimate beneficial owners of an enterprise is an important additional action point in the M&A practice after completion of an acquisition (“post-closing action”). What? Belgian Companies, (international) non-profit organisations, foundations, trusts and legal entities that are comparable to trusts, have the following new obligations under the Belgian “Law of 18 September 2017 on the prevention of money laundering and terrorism financing and on the restriction of the use of cash”: The Law adds to the Belgian Companies Code (Articles 14/1 and 14/2) and to the Belgian NPO and Foundations Law[1] (Articles 58/11…
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