Belgium’s New Code of Companies and Associations: Simplifying Non-Profit Regulations
As of May 1st, 2019, Belgium’s non-profit organizations are now subject to the new Code of Companies and Associations (CSA), which aims to simplify and clarify the law governing these entities.
What is a Non-Profit Organization?
A non-profit organization (ASBL) is created through an agreement between at least two founding members, known as the articles of association. The organization’s actions must have a disinterested goal and cannot benefit its founders or members financially, except for the purpose stated in its articles of association.
Key Characteristics
- Unlimited profit-making activities allowed
- Strictly prohibited from distributing profits
- Can file for bankruptcy and benefit from insolvency and liability laws
How Do Non-Profits Operate?
A non-profit is composed of its members, who are responsible for electing a board of directors. The directors manage the organization and are responsible for its proper management.
Essential Considerations
- Ensure rotation in the composition of board members to bring in new ideas
- Register non-profit directors in the UBO register as “beneficial owners”
What Are the Characteristics of a Non-Profit?
A non-profit can have legal personality if it meets specific conditions, including:
- Having its registered office located in Belgium
- Having at least two founding members
- Containing certain required information in its articles of association
Legal Obligations
- Register with the Crossroads Bank for Enterprises and receive an identification number
- File annual financial statements
- Pay taxes accordingly
Conclusion
Belgium’s new Code of Companies and Associations aims to simplify and clarify the law governing non-profit organizations. Non-profits can now engage in unlimited profit-making activities while maintaining their charitable purpose. It is essential for non-profits to understand their legal obligations and comply with the new regulations to ensure their continued success.