Rules still applicable for existing companies

The new company legislation applies to companies incorporated since May 2019, and to the existing mandatory rules (see article). If the articles of existing companies are amended, the company will have to be adapted to the new legislation.

What is shown below concerns the old regulation, which could still apply to existing companies. So for all themes regulated by mandatory legislation, the new regulation will have to be reviewed. (The mandatory rules from 1.1.2020)

The private company instead (PC) of the private company with limited liability (PCLL).

1. The name must be changed from 1.1.2020. The PCLL becomes a PC. Also the rules of responsibility of the directors (instead of "business managers") are regulated by the new legislation.

A dispute between the shareholders (the former partners) can result in a dispute settlement that will also be governed by the new legislation. The share capital (the fully paid-up part of PLLC and legal reserves of cooperative company with limited liability) is converted by operation of law into a statutory unavailable capital account.

2. In the PCLL (now pc) it was possible to appoint a quasi-irremovable manager, more specifically a manager-partner who is appointed in the articles of association. Depending on the number of shareholders, this can only be removed if he agrees to this himself or for serious reasons on which the court must decide. This remains applicable as long as the articles of association are not amended.

The non-statutory manager can be removed, which remains.

Previously, each manager was individually authorized to represent the company. This remains, and under the new rules even a managing director can be appointed.

3. Dividends are subject to the new liquidity test regime (which includes maintaining sufficient liquidity to settle debts within the next 12 months).

4. The shares in a PCLL are limited transferable. The shares may only be transferred without the consent of the associates to an associate, spouse, direct relative or other persons authorized by the articles of association. Because this is additional right, this remains.

The transfer to a person other than the aforementioned always requires the consent of the co-partners. This can now be changed via an amendment to the articles of association.

5. New rules will again apply to liquidation and dissolution.

The Cooperative Company with Limited Liability (CCLL) / Cooperative Company with Unlimited Liability (CCUL) becomes Cooperative Company (CC).

6. The cooperative company (CCLL / CCUL) was a company composed of a variable number of partners with variable contributions.

There were two types: the CCUL (Cooperative Company with Unlimited Liability) where the partners have unlimited joint and several liability, and the CCLL (Cooperative Company with Limited Liability) where the partners have limited liability.

The partners of the CCUL are liable for all debts of the company. Moreover, this liability is joint and several, which means that a third party can recover the entire debt of the company from one partner. With the CCLL, the partners are then, just as with a PCLL, only bound up to the amount of their contribution.

These companies automatically become CCs, but this is now reserved for cooperative partnerships and no longer for professional cooperation (eg cooperation between doctors, lawyers). If this is no longer the case, any interested party could request the judicial dissolution. The Court can then allow a transition period to convert the CC into another legal form (the most obvious, the PC).

7. The cooperative company must still be set up by at least three partners under pain of nullity. It can only issue registered shares with voting rights and bonds.

8. The conditions for entry and exit can be freely determined in the articles of association.

If nothing is determined, the general meeting decides on admission. If there is no statutory regulation, the partners have the right to withdraw or to have part of their shares taken back.

The Joint-Stock Company (JSC)

9. The JSC remains the JSC. 1 single person will even be able to set it up, but for its further operation, a minimum of 2 shareholders will be required. This company retains the concept of capital.

The mandatory rules applicable at the PC also applies here. So eg. If a director has a conflict of interest with the company in a specific decision, he will from now on abstain (instead of a former ad hoc director).

New structure forms of management are possible: the former board of directors (but without an executive committee), or a dual management of the board of directors and the supervisory board.