Last modified:Thursday 31 October 2019
The new company law – which will take effect on 1 May 2019 – represents the biggest reform in this area since 1935. Its purpose? To make it easier for you to choose a company form and reduce administrative red tape.
4 company forms
The biggest eye-catcher of the reform is the reduction of the number of company forms to four basic types. There used to be no fewer than 15! From now on, these are your options:
Private limited company (SRL / BV)
This is the former sprl/bvba, a form that is particularly suitable for start-ups and small and medium-sized companies. It is even more attractive now that a simple standard model exists. The legal standard statute can then be supplemented with all sorts of options that provide a degree of flexibility. Its great advantage? No need for any starting capital (in the past that was over 15,000 euros!).
This form is easy to set up, yet riskier due to the personal and unlimited liability. It becomes the basic form of the partnership – in which at least one partner holds unlimited liability – and the only company form without legal personality, unless you opt for a general partnership (SNC/ VOF) or a limited partnership (Scomm / GCV). Under the reform, the latter are merged into the partnership to become the only partnerships with legal personality.
Temporary character: you can enter into a partnership temporarily, for the duration of a construction site, for example.
Secret character: if you act in your own name, without revealing the existence of your company or your partners, you have a ‘silent’ partnership.
Cooperative company (SC / CV)
This form is getting its individuality back and will only be open to companies that actually live by the cooperative philosophy. What is the main purpose of a cooperative company? Not to enrich the shareholders, but to channel its proceeds towards achieving the cooperative’s social objectives. Setting up a cooperative company requires at least three shareholders, all of whom have limited liability.
Limited liability company (SA / NV)
As before, this is the most suitable form for large companies, with the starting capital remaining at 61,500 euros. The way an nv may be run is the big difference in the reform.
Previously, the profit-making aspect was used to distinguish companies from associations. If you and your associates make a profit, then you have a company. If not, you have an association. In the new regulations, ‘profit distribution’ becomes the determining factor. An association is free to carry out commercial activities and make a profit, provided that it is not distributed among its members, directors, founders or others. It pursues objectives altruistically. By comparison, personal enrichment is an essential characteristic of a company.
Do you have questions about the different company forms?
Get in touch with one of our advisors by email at email@example.com or by phone on 1819.