The Public Limited Company (société anonyme/naamloze vennootschap) is roughly equivalent to the English public limited company, the German Aktiengesellschaft, the French société anonyme or the Italian societè per azioni. It is incorporated in a notarial deed by at least two shareholders who present to the notary a financial plan covering the first two years of activity. No prior authorisation needs to be obtained.
Post-incorporation, public companies need to be registered with the central entities register (Banque Carrefour des Entreprises/Kruispuntbank voor ondernemingen) before commencing trading. Upon registration, the company's trading activities need to be specified in accordance with the relevant NACE Code (the NACE code system is the European standard for industry classifications and was introduced in 1970). Prior permission to trade is required for businesses including diamond trading, pharmaceuticals, financial services and some industries in the handcrafts field. The register is open to public inspection for basis research only. Directors of enterprises qualifying as SMEs (small and medium enterprises) need to show evidence of management knowledge prior to registration.
A company is not classified as an SME if any company having more than 25 per cent of its share capital exceeds two or more of the following limits:
A company's registration number and place of registration must be stated on its letterhead and communications with the public. Furthermore, its name, registered office, VAT number and a bank account number must be stated on all invoices and documents requesting payment.
The capital of a public limited liability company is required by law to be fully subscribed at formation. The minimum capital is €61,500 and where the capital subscribed is more than the required minimum, each share has to be paid up to the extent of at least 25 per cent but the total paid up capital cannot be less than €61,500. The balance is called up by the board of directors at their discretion.
No minimum value share value is required and where capital is provided other than in cash, a statutory auditor (reviseur d'entreprises/bedrijfsrevisor) is to report on such assets and their value.
Two shareholders are the minimum number required to found a public limited liability company and both corporate entities and natural persons may be shareholders. Capital can be freely sourced from abroad.
Shares can take the form of registered shares or dematerialised or paperless shares, or any combination of the two. Bearer shares were abolished in 2008.
Dematerialised shares ownership is evidenced by the name of the owner being entered in an account opened with a registered institution authorised to keep such accounts. The account is in the name of the owner of the dematerialised share or their nominee. All shares however, must remain in registered form until fully paid up.
Any transfer of shares in a public limited company is only valid after the company is finally set up and 25 per cent of each share is paid up. Share transfers are in principle free but may be restricted by an appropriate clause in the articles. Any absolute ban on transfers will be invalid, but clauses under which the prior authorisation of the board or the general shareholders' meeting is required, or under which a right of first refusal/offer is granted to the other shareholders, are allowed in so far as these conform with the conditions in the articles of association or in an agreement between shareholders, and are limited to a maximum period of six months and must be justified at all times by the object of the company.
A public limited company may issue both capital shares and profit shares. Shares carry voting rights as well as rights to participate in the dividends of the company and upon liquidation in the distribution of its surplus assets. They also carry a preferential right to subscribe any capital increases. These rights are in principle proportional to the respective nominal capital value of the shares but the articles of association may create one or more classes of shares which may have a preferential treatment as to any of the rights described above.
Non-voting shares may be issued as long as these shares do not represent more than one-third of the capital and confer a right to a preferential dividend as well as to the preferential reimbursement at the time of liquidation of the share capital, and to an equal share in the distribution of surplus assets. The shares can recover their voting rights in cases where these conditions are no longer complied with or whenever the general shareholders' meeting is convened to modify the respective rights connected to the shares or to wind up, merge or split up the company, modify its object, reduce the company's capital or the preferential rights attached to shares or to authorise the board of directors to increase the capital to the amount of the authorised capital.
Profit shares may be issued by the public limited company for services rendered to the company for example. These shares can have dividend and voting rights but the profit shares can never have more than 50 per cent of the voting rights of capital shares, nor more than two-thirds of the number of votes cast by the owners of capital shares.
A public limited liability company is only able to acquire its own shares, directly or indirectly, within the limits of the law after a decision by a general meeting of shareholders in the form required by law for such decisions, or exceptionally, following a decision by the board of directors.
The public limited company is run by a board of at least three directors, elected by the shareholders for a maximum term of six years. However if the company has only two shareholders and the general meeting of shareholders acknowledges that fact, it can be run by a board of two directors as long as the articles of association allow this. The directors may be re-elected or removed at any time by a majority of shareholders. The board of directors will usually appoint one or more managing directors for the day-to-day management of the company. None of these is required to be a Belgian national or resident and a company can be appointed as a director.
The statutory powers of the board include any powers which are necessary or useful for the realisation of the company's object, except for those decisions which are reserved by law to the shareholders' meeting. The articles of association may reduce these powers (although such reduction of powers cannot be enforced against third parties) or extend the powers (e.g. capital increase within the limits of the authorised capital.
The directors are liable for any damages due to their management where they did not abide by the articles of association or the Companies Code. They can be sued by the company, at the instigation either of the shareholders' meeting or of minority shareholders, who hold shares which represent 1 per cent of the voting rights. The minority shareholders can request the court to have an independent audit carried out on the accounts whenever they have presumptions that the interests of the company are (or risk being) harmed.
The board of directors or the statutory auditors can convene the general shareholders' meeting. They are obliged to do so if shareholders representing one-fifth of the share capital require them to do so. If all shares are registered, notices may be sent by mail to the shareholders.
Shareholders may vote in person or by a proxy holder who, unless provided otherwise in the articles, does not need to be a shareholder. The shareholder can cast his vote by correspondence in the form and within the time-limit laid down in the articles of association. It is possible to issue a public invitation to the shareholders to appoint a person as their proxy holder who will then cast their vote in the way requested.
Although one still finds limitations of voting rights in the articles of association of existing companies, these limitations have become illegal. The voting right of shareholders is in principle not limited, and each shareholder has a number of votes equal to his participation in the share capital. Agreements between shareholders limiting their voting rights cannot be agreed upon for a period exceeding five years and cannot contain any clauses which are contrary to the Companies Code or the interest of the company. Moreover the shareholders cannot undertake to vote according to instructions issued by the company, a subsidiary, or the board.
One general shareholders' meeting must be held every year to allow the shareholders to discuss and approve the annual accounts, the annual management report and the annual audit report of the statutory auditor, and to decide about the distribution (or reservation) of profits and to grant discharge to directors. Decisions are usually taken by a simple majority vote. Before any distribution of dividends, 5 per cent of the net profit is to be retained as a statutory reserve until such time as the statutory reserve amounts to 10 per cent of the share capital. Moreover a distribution of dividends is only allowed on the condition that it does not bring the amount of the net assets (i.e. total assets less liabilities) under the amount of the paid-up capital plus reserves which are not available for distribution. The articles of association may allow the board to distribute interim dividends.
Special shareholders' meetings may be convened to supervise and ratify the operations of the company, appoint directors or remove them. An extraordinary general shareholders' meeting has to be convened in cases of substantial loss.
Unless specified differently in the corporate charter, decisions by an extraordinary general shareholders' meeting are taken by a simple majority vote. However a special majority is always required for:
At least 50 per cent of the share capital must be present or represented at the shareholders' meeting, failing which a new meeting is to be convened where a quorum of 25 per cent is sufficient, and the decision is to be taken by a 75 per cent majority or even an 80 per cent majority for a modification of the object clause.