The new Code for Companies and Associations is causing a (r)evolution in the Belgian legal system. The simplification and flexibilisation of company law also affects funds that are organised in the form of a Belgian company.

On May 1st 2019, the new company law came into effect. Since then, it is no longer possible to start a limited joint stock company (CommVA). But many public, institutional and private investment firms still use that form of company today. From January 1st 2020 and at the latest by December 31st 2023, they also have to opt for a different legal form, says Pascal Vanden Borre, Corporate M&A partner at Stibbe. ‘If they don’t do this, from January 1st 2024, by law, they will be converted into a limited liability company with a single director.’

The only remaining legal form for fund managers will be a limited liability company. ‘However, following the current AIFM law or the overarching regulations that apply to funds, funds can still opt for a limited liability company or a limited joint stock company. But the industry and the financial supervisor FSMA are in discussion about this, and also this regulation is likely to be adapted in the coming months.’

The most logical option for a limited joint stock company becomes a limited liability company with a single director. In terms of structure, this is closest to a limited joint stock company, says Annelies Van Huffel, associate at Stibbe. ‘In doing so, attention needs to be paid to how this sole director is appointed. For this, tailored solutions are required.’

Any which way, the new company law is good news for the funds industry, concludes Pascal Vanden Borre. ‘There is the limitation of director’s liability, you can set up better suited governance structures, and you are free to model the investment, voting, dividend, and liquidation rights linked to shares. Thanks to the new WVV, funds can be organised statutory as it is already being done abroad.’

Pictures: ©Marco Mertens