An introduction and evaluation of the 2019 Belgian Companies Act – Preparing for the previous war?
This article discusses some aspects of the completely new Companies Act (“BCCA”) adopted in Belgium in 2019. Even though the reform touched upon all aspects of company law and all company types, its main goal was to roll back Belgian goldplating of EU company law Directives and to turn the hitherto very rigid Belgian private company into a very flexible, contractual vehicle with little mandatory law applicable to it, except for rules on creditor protection and directors’ disclosure duties to make sure general meetings decide on issues on an informed basis. As part of this reform, the concept of legal capital (not just minimum capital requirements) was abolished for the private company. In order to allow Belgian company to better compete in the light vehicle competition, Belgium moved from the real seat doctrine to the incorporation theory. For public companies, the main reform was probably the introduction of loyalty shares, which (so far) did not succeed in attracting more listings to the Brussels stock market, but did allow existing controlling shareholders to cement their control with a smaller stake than before.
Except perhaps for the partially failed reform of the rules on changes to class rights, the reform was very successful in increasing legal certainty about many issues about which no authoritative case law exists. The rationale for the reduction of the number of company forms was less convincing, and the reform of the cooperative company was botched because of the conflicting demands emanating from the influential cooperative lobby. But in a way, the reform fought the last war (the light vehicle competition) while arguably not enough attention was paid to enabling venture capital and private equity contracting and the capital structures that go with these investments.