Legal Alert - March 30 2020 - Mandatory provisions of the companies and associations code

March 30, 2020

Since January 1, 2020, the new Companies and Associations Code (the “CAC”) applies to all existing
companies.

The mandatory provisions of the CAC apply automatically; the additional provisions only apply insofar as
they do not conflict with the current articles of association of the companies.

Existing companies will have four years, i.e. until January 1, 2024 at the latest, to bring their articles of
association in line with the CAC.

However, if the articles of association have to be amended before January 1, 2024, e.g. as a result of a capital
increase or capital reduction, a change of object, etc, then companies are obliged to bring their articles of
association in line with the CAC at the same time as this decision.

Below you will find a non-exhaustive list of a number of mandatory provisions of the CAC, which are already
automatically applicable as of January 1, 2020.

THE NAMES AND ABBREVIATIONS OF COMPANY FORMS

The former BVBA / SPRL must refer to their “new” legal form - “Besloten Vennootschap” or “BV” in Dutch /
“Société à Responsabilité limitée” or “SRL” in French - on all deeds, invoices, websites, etc.

THE PRIVATE LIMITED LIABILITY COMPANY (“BV”) IS NO LONGER A CAPITAL
COMPANY

The capital and the legal reserve of the BV (and the cooperative company (“CV”)) are transformed,
automatically and without completion of any formality, into a “non-available equity account”. This can be
made available by amending the articles of association.

METHOD OF VOTING AT GENERAL MEETINGS

As from January 1, 2020, abstentions may no longer be taken into account in a vote at the general meeting.
These will be neutralised with the introduction of the CAC.

THE GENERAL RULES ON DIRECTORS’ LIABILITY

With the implementation of the CAC, a maximum amount of compensation is applied, which depends on the
turnover and the balance sheet total of the company in question.

However, the limitation of liability only applies in the event of accidental minor errors.

COMPOSITION OF THE ADMINISTRATIVE BODY

The CAC introduces a cumulative and cascade ban. One may no longer be a director in one’s own name,
and at the same time as a permanent representative of a director-legal person. In addition, a director-legal
person must always appoint a natural person as permanent representative.

DOUBLE DISTRIBUTION TEST IN THE PRIVATE LIMITED LIABILITY COMPANIES

If one wishes to make a distribution of any kind within a private limited liability company, this must be
subject to a double distribution test.

First of all, the general meeting must carry out a solvency test. This test consists in prohibiting a distribution
of dividends if the company’s net assets are negative or would become negative as a result of such a
distribution.

The solvency test is inextricably linked to the liquidity test. The decision to distribute dividends taken by
the general meeting shall only take effect after the administrative body has ascertained that, following the
distribution, the company will be able to continue to pay its debts falling due for a period of at least twelve
months as of the date of the distribution.

NEW ALARM BELL PROCEDURE FOR THE PRIVATE LIMITED LIABILITY COMPANY

For BV’s/SRL’s, a new alarm bell procedure has been introduced whereby two criteria determine whether
the procedure should be applied. For this you will also have to perform the solvency and liquidity test.

The above is not an exhaustive list of the mandatory provisions of the CAC. If you have any further questions
or would like advice or assistance regarding a possible revision of your articles of association, please do
not hesitate to contact us.