New measures have been introduced against dormant companies to fight both social and tax fraud and avoid such companies being used to conduct illicit operations (sections 18 and 19 of the Act on urgent provisions to combat fraud, adopted on 15 July 2013 and amending the Act of 16 January 2003 creating the Crossroads Enterprise Database (Banque-Carrefour des Entreprises/Kruispuntbank van Ondernemingen – BCE/KBO). Pursuant to these new measures, the BCE/KBO can remove companies from its register in two situations.
Non-filing of annual accounts
First, the BCE/KBO can strike companies off if they fail to file annual financial statements for three or more consecutive financial years. The non-filing of annual financial statements was already sanctioned by various means, such as criminal penalties and additional administrative filing fees. The Companies Code (section 182) also allows for a petition to the commercial court for judicial winding-up of a company that does not file annual accounts for three consecutive years. However, this sanction is not sufficiently used in practice (in light of the length and cost of a court action) and the government therefore wanted to implement additional measures to ensure that dormant companies registered at the BCE/KBO can be struck off automatically. Note that the company’s registration with the BCE/KBO is reactivated once all the missing financial statements are filed with the National Bank of Belgium.
Second, the BCE/KBO has the right to strike off companies that meet the following five cumulative criteria:
- the company has not had any active capacities, activities or establishments registered at the BCE/KBO for three years or more;
- the company is still registered as an active company;
- it does not have any application for authorisations or capacities pending with the BCE/KBO;
- no change has been made to any of the information registered with the BCE/KBO for seven years or more; and
- it has not published any decisions (other than financial statements) in the annexes to the Belgian State Gazette in a period of seven years or more.
These are all indicators that a company is no longer actively trading. The BCE/KBO can reactivate the company’s registration if one of the five conditions is no longer fulfilled.
In light of the risks of inactive companies being used in fraudulent activities, it is important that third parties are aware of the fact that these companies have been struck off. Therefore, automatic strike-offs by the BCE/KBO are published free of charge in the annexes to the Belgian State Gazette. Extracts from the companies’ files with the BCE/KBO will also show that they have been struck off.
Entry into force
The BCE/KBO’s right to strike off companies failing to file annual accounts for three consecutive financial years came into force on 1 July 2013. For striking off inactive companies, the BCE/KBO’s right will come into force on a date to be set by royal decree, and in any case no later than 31 December 2013.
Other penalties apply in cases of incorrect registration or in the absence of registration, including fines of up to EUR 10,000, multiplied by a coefficient (centimes additionnels/opdentiemen) of 6, bringing the maximum fine up to EUR 60,000.