The new law of 19 March 2012 amending the Belgian Companies Code on the liquidation procedure which entered into force on 17 May 2012 (the “Law”) has put an end to the legal uncertainty and the controversial practice that arose from the law of 2 June 2006 regarding the realisation of the dissolution and liquidation of a company in one single act.
This new Law has to be read alongside the law of 22 April 2012 amending the Judicial Code on the liquidation procedure of companies (also entered into force on 17 May 2012).
For the record, the law of 2 June 2006 amending the Belgian Company Code substantially amended the liquidation procedure by implementing a judicial supervision on the liquidation procedures. Such 2006 law was at that time challenged by a large number of legal practitioners as it gave rise to a certain number of practical and construction difficulties. The doctrinal authors were divided and a large number of public notaries were reluctant to proceed to the dissolution of a company and the close of liquidation without having a liquidation period. A clarification from the legislator was therefore needed and expected since 2006.
This long-awaited Law intends to clarify and resolve some of the practical difficulties.
- Dissolution and liquidation of the companies in a single act
The Law facilitates the process of voluntary liquidations of non-deficit companies (i.e. companies without activities and free of debts) and reduces the costs of such procedure.
According to the new article 184 § 5 of the Companies Code, the dissolution and liquidation in one single act are now possible, provided that the following conditions are met:
- no liquidator has been appointed;
- there are no liabilities (according to the statement of assets and liabilities of the company);
- all the shareholders are present or represented at the general meeting and the decision is taken by unanimous resolution; and
- any remaining asset has to be taken back by the shareholders.
For the sake of clarity, it is worth mentioning that all the reports required under article 181 § 1 of the Belgian Companies Code (i.e. the dissolution proposal, special report of the board of a directors, financial statement not older than three months, report of the statutory auditor or of a certified accountant) must still be produced. Moreover, the general meeting of shareholders proposing a resolution on the dissolution and liquidation needs to be held before a public notary and the decision has to be filed with the Commercial Court in view of its publication in the Belgian Official Gazette.
No repartition plan of the assets is however required in such case.
- Other major modifications implemented by the Law
The Law also brings some clarifications on the liquidation procedure in general and implements the following amendments:
- The competent judge for the approval of the liquidator is the President of the Commercial Court acting alone (instead of the Commercial Court acting with three judges). Needless to say, this considerably eases and accelerates the process.
- The Law clarifies the persons who can sign in the name of the company the unilateral request which will be filed before the President of the Commercial Court. Such unilateral request may be signed by the liquidator(s) or by a lawyer or a notary or a director or manager of the company.
- The Law allows the general meeting to propose several liquidators (with a list setting out order of preference, if necessary) in case of refusal by the President of one nominee. In the event the proposed liquidator is not approved by the President, the he will select one of the other proposed candidates that fulfils the required conditions. In the event that no proposed candidates fulfil the conditions, the President will then appoint a liquidator at its own discretion.
- The President of the Commercial Court must give its decision within five business days following the filing of the request (against 24 hours under the former regime, which was difficult for the Court to comply with).
- If the President fails to give its decision within five business days, the appointment of the liquidator will be deemed to be approved (nothing was provided in that respect under the former regime).
- Sanction in case of violation of the Companies Code: If the new liquidation procedure is not observed, any third person or the public prosecutor may file a request with the President of the Commercial Court asking for the replacement of the liquidator (after such liquidator has been heard).