Corporate Governance and Compliance in Belgium: Key Provisions for Private and Public Limited Companies

Introduction

Belgium’s corporate governance framework has undergone significant changes with the introduction of the new Belgian Companies and Associations Code. This article provides an overview of the key provisions governing private and public limited companies in Belgium, including requirements for directors, statutory auditors, and management structures.

Private Limited Companies (BV/SRL)

• Governing Structure: A private limited company can be governed by one or more directors, who may or may not constitute a collegial board of directors. These directors can be appointed or dismissed by shareholders, unless the articles of incorporation provide otherwise.
• Statutory Auditor Appointment: A statutory auditor need only be appointed if the company exceeds two of the following thresholds during two consecutive financial years: EUR4.5 million on its balance sheet, EUR9 million in annual turnover, or 50 employees.

Public Limited Companies (NV/SA)

One-Tier Board Model

• Governing Structure: A public limited company is governed by a board of directors, which must have at least three members unless there are only two shareholders.
• Day-to-Day Management: Day-to-day management can be delegated to one or more managing directors or general managers.

Two-Tier Board Model

• Governing Structure: The company is managed by a supervisory board and an executive board, each with at least three members.
• Supervisory Board Responsibilities: The supervisory board is competent for the company’s general policy and strategy.
• Executive Board Responsibilities: The executive board handles all other powers not reserved to the supervisory board.

Single Director Model

• Governing Structure: The articles of association can provide that public limited companies may be managed by a single director, whether or not a natural or legal person.
• Restrictions: However, if listed on the stock exchange or subject to collegiate management requirements, the sole director must be a public limited company with collegiate management.

Statutory Auditors

The same provisions regarding statutory auditors apply to private and public limited companies. A statutory auditor need only be appointed under specific circumstances, including exceeding certain financial thresholds or belonging to a group of companies that requires consolidated accounts.

B-REIT

Several requirements and restrictions apply to B-REITs:

• Minimum Number of Independent Directors: A minimum of three independent directors on the board of directors
• Representation: Representation by two directors for acquisitions and disposals of real estate
• Statutory Auditor Appointment: Appointment of a statutory auditor accredited with the FSMA
• Internal Control System: Organizing an adequate internal control system reviewed annually
• Director Remuneration: Remuneration of directors and effective managers not directly linked to operations or subsidiaries

ELTIF

Only EU AIFMs authorized under Directive 2011/61/EU can manage ELTIFs in Belgium. Belgian AIFMs are subject to supervision by the FSMA, with specific requirements for shareholding, management, depositary appointment, conflict of interest policies, and remuneration policies. An initial capital of at least EUR125,000 is required.

Conclusion

Corporate governance and compliance regulations in Belgium have become more complex with the introduction of new laws and frameworks. Private and public limited companies must ensure they comply with specific requirements for directors, statutory auditors, management structures, and other regulatory provisions to maintain their good standing and avoid potential consequences.