Part VI: The NV/SA
The rules applicable to the NV/ SA (public limited liability company) are stated in Book 7 of the new Code. They are complemented by the general provisions, applicable to all legal persons, stated in Books 1 - 3. The rules for the NV/SA have not been substantially amended, but have been refreshed and simplified. Unlike other legal entity forms (such as the BV/Srl and CV/SC), an NV/SA will still have capital under the new Code, mainly because of the requirements of the EU Second Company Law Directive. The important changes under the new Code are highlighted below.
Incorporation
Under the new Code, the existing minimum capital requirement of EUR 61.500 is maintained, while the contents of the financial plan required upon incorporation are specified. Contrary to the BV/Srl and CV/SC, it will still not be possible in the future to issue shares in an NV/SA as a compensation for labour or services performed. Under the new Code, an NV/SA can be incorporated by a single incorporator (individual or legal entity).
Voting rights and transferability of shares
The rules on voting rights will change substantially. The “one share, one vote” principle becomes the default rule and can be set aside in the articles of association. The only mandatory rule will be that an NV/SA must issue at least one share with voting rights. It is possible (in non listed companies) to provide for multiple voting rights, voting rights for specific (important) decisions, conditional voting rights or no voting rights at all. The rules applicable to shares without voting rights are also relaxed: it is no longer required that they receive a preferential dividend right and the circumstances in which they acquire voting rights have been reduced: only in the case of (i) a vote on a change of rights, (ii) the conversion of the company into a different legal entity form, (iii) a cross-border merger in which the company is dissolved and (iv) a cross-border transfer of the registered office do they obtain voting rights on the basis of the one share, one vote principle.
In principle, the shares of an NV/SA can be freely transferred, but it is possible to restrict the transfer of shares in the articles of association, an agreement or the terms of issuance of shares. However, it is no longer required that these transfer restrictions are justified ‘at all times’ in the interest of the company. They must be justified by a legitimate interest, taking into account in particular their duration. To ensure transparency, share transfer restrictions inserted in the articles of association must be stated in the share register and, if inserted in an agreement or the terms of issuance, they must be stated in the share register if a party so requests.
Governance
Another significant change is the fact that the NV/SA will in the future be able to choose between three governance models:
one-tier governance, with a board of directors consisting of at least three directors (which may be reduced to two if the company has less than two shareholders) and which is similar to the current model;
two-tier governance, with a supervisory board and a management board, comparable to the Dutch and German model. In this model, the supervisory board, composed of at least three members and appointed by the general shareholders meeting, is responsible for the supervision of the management board and the general policy and strategy of the company. It also has all powers reserved by law to the board of directors of the one-tier governance model. The members of the management board, which must be at least three, are appointed and dismissed by the supervisory board. It has all powers which are not reserved to the supervisory board. A person cannot at the same time be a member of the supervisory board and the management board.
A sole director. The sole director can be a natural or legal person and may or may not be appointed in the articles of association. It is possible to provide therein that the sole director is personally liable for all obligations of the company, as is the case in the existing partnership limited by shares (“commanditaire vennootschap op aandelen”/“société en commandite par actions”), which will be abolished. The position of the sole director may be strengthened by granting him veto rights with respect to amendments to the articles of association, distributions to shareholders and his own dismissal.
As is currently the case for listed companies, in case of a conflict of interest of a director, the conflicted director must abstain from participating in the deliberation and voting and the other, non-conflicted, directors will decide on the matter. If all directors are conflicted, the decision must be submitted to the general meeting of shareholders. In case the sole director has a conflict of interest, the decision must be taken by the general shareholders meeting and may thereafter be executed by the sole director.
Finally, the interpretation of ‘day-to-day management’ is clarified and includes any decisions which are (i) part of the daily life of the company, or (ii) of lesser importance or (iii) urgent.
The dismissal of directors, the grounds for directors’ liability and the cap on the liability of directors will be discussed in the next newsletter appearing on Friday 26 April 2019.
Please contact the Curia Corporate and Non-profit team with any questions:
Yvette Verleisdonk, partner (Yvette.verleisdonk@curia.be)
Sarah Verschaeve, partner (sarah.verschaeve@curia.be)