Opt-in only becomes applicable after publication of the amendment to the articles of association – practical implications
The new Companies and Associations Code (CAC) entered into force on 1 May 2019. This implies that newly incorporated companies whose deed of incorporation has been deposited at the registry on or after 1 May 2019, will be governed by the new CAC. For existing companies, a transition period is provided for until 1 January 2020. Until that date, they will still be governed by the former Companies Code. From 1 January 2020, the mandatory provisions of the CAC (including the additional provisions unless derogated from in the articles of association) will become applicable.
The legislator enables existing companies however to be governed by the new CAC even before 1 January 2020 by using the ‘opt-in’ mechanism. If they decide to do so, the CAC will become applicable in its entirety. Indeed, it will not be possible to only apply part of the Code. The opt-in must be achieved by amending the articles of association, stipulating that the company decides to apply the provisions of the new CAC and making the necessary amendments to its articles of association in order to comply with it. The new CAC will become applicable from the moment that the amendment to the articles of associations has been published in the Annexes of the Belgian Official Gazette.
The legislator’s choice to link the entry into force to the publication of the amendment to the articles of association and not to the actual time of the decision itself, has practical implications. Other decisions than the one related to the opt-in cannot be made in the same deed by applying the new rules. So, the company that decides to opt-in and wants, for instance, to change its corporate object by applying the eased rules (the CAC does no longer require a statement of assets and liabilities, nor an audit report) can only do so by having executed two notarial deeds: a first one with the decision to opt-in, and later on, after the publication of the first deed, a second one to change its corporate object. If the company makes both decisions in the same deed, the decision to change its corporate object must be made by applying the rules of the former Companies Code. The implementation of new possibilities provided by the CAC (such as multiple vote rights, distribution of capital, …) can be done in the same deed as the one deciding the opt-in, but only under the condition precedent of the deed’s publication. The decision itself still has to be made by applying the rules of the former Companies Code, which implies that abstentions will still be considered as dissenting votes. After the CAC has become effective, i.e. after the publication, abstentions will no longer be taken into account.
As from 1 January 2020, every company may automatically apply the eased rules, provided that the stricter legal provisions have not been included in the articles of association. If this is the case however, the company will still have to apply these provisions.
This blog post has been updated on 27 September 2019: see link.
Anneleen Steeno, intui attorneys