BCCA Question 3: the (obsolete?) duty to disclose if there is only one shareholder

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/SA[2] 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 abolished, except for the duty to declare and disclose. These obligations were codified in Articles 2:8, §4 and 2:14, 4° BCCA, which apply to the BV/SRL as well as the NV/SA types of companies.[3]

Article 2:8, §4 BCCA stipulates that when all shares in a private and public limited liability company become aggregated and are held by one person, both the corporate action and the identity of that person must be declared in the company records.

Artikel 2:14,4° BCCA stipulates that the subject-matter of the documents that must be declared under the BCCA provisions (thus the aggregation of shares in one shareholder’s ownership) must be disclosed by notice published in the Annexes to the Belgian State Gazette.

If a company, during its lifecycle, changes from having multiple shareholders to having only one shareholder, its governing body will thus (i) have to draw up minutes in which the aggregation of shares is acknowledged and the identity of sole shareholder is confirmed, (ii) have to file this document in the company records kept at the clerk’s office of the enterprise court having jurisdiction, and (iii) have to disclose the mere fact that it fulfilled this (previously formalistic) obligation by publishing a notice of it in the Annexes to the Belgian State Gazette.

The identity of the sole shareholder does not have to be disclosed, only the subject-matter of the documents that were filed with the enterprise court’s clerk.

If the company was incorporated by one person, however, (and has therefore only one shareholder all this time), there is no duty to disclose this because the one-person nature of the company was already mentioned in the deed of incorporation.

Many question the need for this obsolete duty to declare and disclose, given that the most important purpose of it, which is to inform the company’s creditors about the identity of the shareholder who has become jointly liable in the contractual relationship with this creditor, has disappeared.


3.      (Absence of) specific deadlines under law and applicable sanctions

The BCCA does not set specific deadlines by when a company must complete the necessary steps and fulfil the formalities. According to legal doctrine, the term is thirty days because this is also the time allowed for submitting the first version of a company’s articles of association and incorporation deed.[4]

If the duty to declare and disclose is not fulfilled, the company’s governing body will be liable for any harm or loss suffered by third parties because this body is responsible for any violation of the BCCA.

Although this seems to be risky at first sight, you must not fear the sanctions blindly. It is still up to the third party to prove that he has suffered actual harm that is caused by the company’s failure to fulfil the duty to declare and disclose. In any event, since the third party (e.g., a creditor of a company) cannot pursue any additional asset (belonging to the sole shareholder) after the company becomes a one-person-governed entity under the new legislation[5], it will be very difficult to prove the actual harm suffered.


4.      Conclusion

Because of the BCCA, the use of one-person companies has become modernized and more popular, but a few archaic formalities—their price tag—still remain.

Although the legislature did not give any logical reasoning for why companies must still fulfil outdated requirements concerning declaration and disclosure when they evolve from having multiple shareholders to having one shareholder, and the practical application of the sanction mechanism does not seem clear, companies must still adhere to the rules as long as there is no legislative reform of it.

To every CEO or legal advisor who reads this: it is advised that you submit the necessary documents and disclose the corporate action within 30 days after the company shareholding has changed to having only one shareholder.

To the Belgian lawmaker, if he or she is reading this: we would like to hear your reasoning for why these obsolete formalities have survived the so-called modernization and flexibilization of Belgian company law.



[1] The other company types (cooperative company, partnership and limited partnership) cannot have just one director, and they are not discussed in this article.

[2] NV or BV (which is also called a BVBA).

[3] Under Article 7:231 BCCA, the duty to declare and disclose was initially imposed on public limited liability companies (NV/SA) only. The Remedial Act of 28 April 2020 broadened this scope so that private limited liability companies (BV/SRL) must also be bound by this obligation. Article 7:231 BCCA has thus been abolished.

[4] Article 2:8, §1 BCCA.

[5] Under the BCCA, the sole shareholder no longer has joint liability.

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