From 1 May 2019, the world of business will be in a state of upheaval. New forms of company are emerging, the concept of capital for SRLs and SCs is disappearing, regulations concerning voting rights and shares will be relaxed and new rules will apply concerning the distribution of company profits… The new rules are radical for entrepreneurs. But the new company law also offers opportunities and possibilities. Here are the four most important changes.
1. Plus que quatre formes de sociétés
In the past, there were many different types of company. From 1 May 2019, the entrepreneurial landscape will be made up of a new “Big Four”.
Existing companies are converted into one of these forms. New businesses can choose from:
- The SRL (limited liability company):
The old SPRL disappears and is replaced by the more flexible SRL. It is the “basic form of society” par excellence. Founders of small and medium-sized businesses will particularly appreciate the SRL. There are few compulsory rules. And thanks to the broad scope of the Articles of Association, entrepreneurs can now work with a “tailor-made” company. This gives them the opportunity to ‘disconnect’ voting rights from share value. Practical for those who want to transfer the business without losing total control.
- The simple partnership, with its two variants (the SNC and the Scomm):
The simple partnership is the only form of company without a legal personality. Because of its simplicity, this form is ideal for estate planning. But also, for example, when several professionals want to work together on a temporary project. Variants of the simple partnership (SNC and Scomm) [SI1] have legal personality.
- The SC (cooperative society):
For companies that genuinely pursue a cooperative aim, there is the SC. This also explains why this form always requires three founders. The raison d’être ? Meet the needs of shareholders and/or develop their economic and/or social activities. Take, for example, a group of local residents who want to invest together in environmentally-friendly energy sources in the neighbourhood.
- The SA (public limited company):
The public limited company (SA) remains the preferred form of company for companies of a certain size, where raising capital is paramount. The reform abolishes certain rigid rules of corporate governance. From now on, all you need is a founder to set up an SA.
2. The minimum capital requirement is no longer necessary for SRLs and SCs
From 1 May 2019, you will no longer be required to provide a minimum capital of €18,550 to set up a business. In other words, the concept of capital disappears completely. Does this mean that you can now set up a business without any capital at all? No.
The company still needs to have sufficient funds to carry out its activities from the outset. Sufficient start-up capital – based on a detailed financial plan – remains essential.
Strict rules also apply when you distribute your company’s profits. To pay a dividend, the company must first pass a balance sheet and liquidity test. After the dividend payment:
- votre capital ne peut devenir négatif ;
- you must be in a position to pay all debts due and payable for the next 12 months.
3. Work and know-how in exchange for shares
You have no funds or assets to inject into your business? It doesn’t always have to be a problem. In future, a founder – under the supervision of an auditor – will also be able to contribute work and expertise in exchange for shares.
If this work is suspended for any reason, the rights attached to the shares will (temporarily) lapse.
The new company law therefore takes account of our constantly evolving society, in which entrepreneurs bring valuable products to market thanks to their knowledge and expertise. Just think of the many applications developed in recent years.
4. Amending the articles of association: different deadlines
Entrepreneurs have time to digest these changes, seek advice and put their articles of association in order at the notary’s office.
- New businesses will be subject to the new regime from 1 May 2019.
- Existing businesses can use the new company rules from 1 May 2019.
- From 1 January 2020, the new rules for companies will come into force for existing companies, associations and foundations. From this date, you will have to modify the statutes to make them compliant with the new legislation.
- December 31, 2023 is the final date. The legal form of your business will then automatically take one of the new legal forms. Your statuses are not adapted in time? As an administrator, you are personally responsible for potential adverse consequences. Additionally, automatic conversion to a legal form may be to your disadvantage…