Setting up a BV in Belgium: steps, financial plan and key points

Do you want to set up a BV in Belgium? Since the Belgian Companies and Associations Code of 2019 (Wetboek van vennootschappen en verenigingen, WVV / Code des sociétés et des associations, CSA), the private limited company (besloten vennootschap, BV / société à responsabilité limitée, SRL) has been the most widely used company form. It replaced the former BVBA/SPRL and is particularly flexible.

Whether you want to run your business as a self-employed person through a company or start a venture with partners, a BV gives you legal personality and separates the company’s assets from your private assets. This article walks you through the steps and the key points for founders and directors.

Why set up a BV?

• Limited liability: as a shareholder, you in principle only risk your contribution. The company’s debts are not your debts, unless you gave a personal guarantee or are held personally liable as a founder or director.
• No minimum capital: the BV no longer has share capital, but it does have equity. The founders must provide it with starting equity that is sufficient for the planned activity.
• Flexibility: the articles of association can largely determine the rights attached to shares, voting rights, profit distribution and share transfers.
• Tax and social security aspects: a company can be tax-efficient, but that depends on your situation. Have your accountant run the figures beforehand.

Step 1: the financial plan

Before incorporation, the founders draw up a financial plan and hand it to the notary. The plan justifies the starting equity in light of the planned activity for at least two years, taking into account other sources of financing. The law (Article 5:4 WVV/CSA) prescribes a minimum content, including:

• a precise description of the planned activity;
• an overview of the sources of financing, with any security provided;
• an opening balance sheet and projected balance sheets and profit and loss accounts after 12 and 24 months;
• a budget of income and expenditure over at least two years, with the assumptions used.

The financial plan is not a formality. If the company is declared bankrupt within three years of acquiring legal personality and the starting equity was manifestly insufficient for the normal conduct of the planned activity for at least two years, the founders can be held jointly and severally liable for the company’s debts, in the proportion determined by the court (Article 5:16 WVV/CSA). So have the plan drawn up or reviewed by an accountant.

Step 2: name, registered office and corporate object

Choose a name that cannot be confused with that of existing businesses and check this beforehand, for instance in the Crossroads Bank for Enterprises (KBO/BCE) and in the trademark registers. The articles of association state the region in which the registered office is located; the exact address helps determine which enterprise court (ondernemingsrechtbank / tribunal de l’entreprise) has jurisdiction. Also describe the company’s object, i.e. the activity it will carry out, broadly enough but in concrete terms.

Step 3: the articles of association and the shareholders’ agreement

The articles of association are the company’s constitution. They govern, among other things, the shares and the rights attached to them, management and representation, the general meeting and share transfers. Where there are several shareholders, it is advisable to also conclude a shareholders’ agreement, covering for instance the exit of a shareholder, a right of pre-emption or a non-compete clause. Unlike the articles, this agreement is not published.

Step 4: the deed of incorporation before the notary

A BV is incorporated, on pain of nullity, by notarial deed, executed before a notary (Article 2:5 § 1 WVV/CSA). Cash contributions are paid in advance into a special account in the name of the company in formation. For a contribution in kind, such as a business, equipment or a vehicle, a report by a registered company auditor (bedrijfsrevisor / réviseur d’entreprises) is required, in addition to a special report by the founders.

The notary files the deed with the registry of the enterprise court and arranges publication of an extract in the annexes to the Belgian Official Gazette (Belgisch Staatsblad / Moniteur belge). The company acquires legal personality upon filing. Anyone who already enters into commitments on behalf of the company in formation, such as a lease, is personally and jointly and severally liable for them, unless the company acquires legal personality within two years of the commitment arising and takes them over within three months of acquiring legal personality (Article 2:2 WVV/CSA).

Step 5: getting started after incorporation

• have the business units and activities registered in the Crossroads Bank for Enterprises through an approved business one-stop shop (ondernemingsloket / guichet d’entreprises), and check whether your activity requires licences or is subject to regional business access requirements;
• activate the VAT number if the company carries out transactions subject to VAT;
• affiliate the company with a social insurance fund, which also collects the annual company contribution, and arrange your own social security status as a director;
• open a business account and choose an accountant;
• take out the necessary insurance, such as professional liability insurance where required or advisable.

The director: appointment and liability

Directors are appointed in the articles of association or by the general meeting, and their appointment is published in the Belgian Official Gazette. A director may be paid or unpaid. A director is liable to the company for faults committed in the performance of their mandate and, in certain cases, also to third parties.

In many cases the WVV/CSA caps this liability at an amount that depends on the size of the company (Article 2:57 WVV/CSA), but not, among other situations, in the event of serious fault, a minor fault that occurs habitually rather than accidentally, or fraudulent intent. As a director, you should therefore closely monitor the accounts, tax and social security obligations and the company’s financial position. Also read our article on directors’ liability in bankruptcy.

Accounting, annual accounts and UBO register

A BV keeps full double-entry accounts and draws up annual accounts every year. The general meeting approves them within six months of the end of the financial year, and they must be filed with the National Bank of Belgium within thirty days of approval and no later than seven months after that year-end (Article 3:10 WVV/CSA). The company must also register its ultimate beneficial owners in the UBO register and keep that information up to date. Neglecting these obligations exposes you to fines and, in the event of bankruptcy, to additional liability.

After incorporation: distributions and the alarm bell procedure

A BV cannot simply pay out all its profits. Every distribution to shareholders must pass a double test: the net assets must not be or become negative, and the management body must establish that, after the distribution, the company will be able to continue paying its debts as they fall due for at least twelve months (Articles 5:142 and 5:143 WVV/CSA). Directors who ignore these rules may be held liable.

If the net assets threaten to become negative, or if it is no longer certain that the company can pay its debts over the following twelve months, the alarm bell procedure (Article 5:153 WVV/CSA) applies: the management body must convene the general meeting within two months to decide on dissolution or on recovery measures. A timely judicial reorganisation can offer an alternative to bankruptcy.

Frequently asked questions about setting up a BV in Belgium

How much does it cost to set up a BV?

The costs include the notary’s fees and expenses, the filing and publication costs, registration with the business one-stop shop and preparation of the financial plan. Ask the notary for an estimate beforehand. Legal assistance with the articles of association and the shareholders’ agreement can be agreed at a fixed fee.

How much money do I need to contribute to a BV?

There is no statutory minimum amount. However, the starting equity must be sufficient for the planned activity, as shown in the financial plan.

Can I convert my sole proprietorship into a BV?

You can contribute your business to a new BV, for example through a contribution in kind of your business assets, accompanied by a registered company auditor’s report. However, debts you incurred as a sole proprietor in principle remain your personal debts. Have the tax and legal consequences checked beforehand.

How many shareholders and directors are required?

One shareholder is enough. Management can be entrusted to one or more directors, who may or may not be shareholders. A legal entity can also be a director, through a permanent representative.

What about an existing BVBA?

Since 1 January 2020, the mandatory rules of the WVV/CSA apply to existing BVBAs, which are now BVs. The articles of association had to be brought into line by 1 January 2024 at the latest. If this has not yet been done, have them amended by a notary: the directors may be held liable for any damage resulting from the failure to do so.

Novex Advocaten can help

We assist entrepreneurs in setting up their BV, from the financial plan and articles of association to the shareholders’ agreement, and advise directors on their obligations. Also read our articles on the differences between a sole proprietorship and a company and on general terms and conditions.

Call 0484 99 22 72 or email asfour@novexadvocaten.be to discuss your project.