BCCA Question 3: The (Obsolete?) Duty To Disclose If There Is Only One Shareholder

• Published date: 03 April 2023
• Subject Matter: Corporate/Commercial Law, Corporate and Company Law, Shareholders
• Law Firm: Monard Law
• Author: Benoit Samyn and Thibault Goister

This contribution briefly discusses the company's duty to disclose when all its shares become aggregated and are held by one person. It must fulfil this duty by declaring it in the company records at the clerk's office of the enterprise court having jurisdiction and by publishing a notice of it in the Annexes to the Belgian State Gazette.

1. Background of the obligation

Since the enactment of the Belgian Code of Companies and Associations (the "BCCA") in 2019, one person can incorporate private and public limited liability companies as the only shareholder, and the companies can even run their businesses throughout their lifecycle as if they were one-person companies.¹

This was not possible before the 2019 company law reform. Under the old company law code, one person alone, as the only shareholder, cannot incorporate a public limited liability company (naamloze vennootschap (NV/SA)), but it could incorporate a private limited liability company (BV/SRL) (the so-called EBVBA in Dutch). If one person was to incorporate the latter company type, a higher start-up capital was required than if several persons were to incorporate it.

According to the old rules, if an NV/SA² became a one-person company, the sole shareholder would be jointly and severally liable for all of the company's obligations that arose after it became a one-person company (if this one-person status lasted longer than a year). If several shareholders (who are natural or legal persons) founded a private limited liability company (a BVSRL) and it was governed by one person throughout its lifecycle while the only remaining shareholder was a legal entity, then, in theory, the same liability rules applied as if it were a one-man governed NV/SA. A natural person who was the only shareholder of a BV/SRL could be held liable for debts of a new EBVBA that he had set up or of which he was the only shareholder at the same time, without any adjustment period.

If the shares of a company held by multiple shareholders suddenly become transferred to only one shareholder, every stakeholder of the company (including creditors) must be informed of the fact that this sole shareholder has become jointly and severally liable for the obligations of the company. Hence, the duty to disclose this information.

2. Only the duty to disclose continues to exist

Under the BCCA, all limitations to the one-person nature of an NV/SA (a public limited liability company) and BV/SRL (private limited liability company) were...