The limited liability company without capital
The key feature of the Belgian Company Code (hereinafter: “BCC”) is undoubtedly the simplification and flexibilization of the private limited liability company. Not only will its name be modified to “besloten vennootschap” or “société à responsabilité limité” (for the purposes of this introduction, we will refer to it as a “limited liability company” (hereinafter: “LLC”), but the complete redrawing of the limited liability company rules should make the limited liability company the company form par excellence.
The Belgian legislator has chosen to abolish the capital concept in its entirety from the LLC-Regulation, which means that this type of company can be established without capital. Nowadays every private limited liability company requires a minimum share capital of 18,550 EUR. This share capital has a double function: the protection of the creditors and as an allocation key for the shareholders.
From the view of the creditor’s protection, a distinction can be made between regulations concerning the formation of capital and the maintenance of capital. In the framework of capital formation, the abolition of the minimum share capital is compensated by sufficient funds upon incorporation, which needs to be justified in a detailed financial plan. The conditions for the financial plan are tightened and are being accompanied by a related founders’ liability. Furthermore, in the context of the maintenance of capital, the abolition of the capital requirements will have consequences on the distribution to the shareholders. Each distribution will be subject to a “double distribution test”; being, on the one hand, a net assets test, and on the other hand, a liquidity test.
With respect to the function as allocation key of the profit distribution rights and the voting rights, these had to be, according to the current Company Code, proportionate to the contributions of the respective shareholders. The BCC points out that the shareholders will have the opportunity to freely amend and regulate the rights attached to the shares in the articles of association. To this end, the only restriction would be the obligation for limited liability companies to issue at least one share with voting rights and one share with profit rights.