Add a bookmark to get started

22 August 20215 minute read

The Company Law Digitalisation Act

On 15 July 2021, the Act of 12 July 2021 with regard to the use of digital tools and processes in the context of company law1 (Company Law Digitalisation Act) was published in the Belgian State Gazette introducing changes to the new Belgian Companies and Associations Code (BCAC). The Company Law Digitalisation Act is taking further steps towards the digitalisation and modernisation of company law by partially transposing Directive (EU) 2019/1151 of the European Parliament and the Council (the Directive) into the Belgian legal system. This Directive aims to promote the use of digital tools and processes, obliges member states to introduce provisions for the online formation of companies and advances the ability to consult and submit company information online.

The two main novelties introduced by the Company Law Digitalisation Act are (i) the possibility to incorporate (certain) legal entities online and (ii) the introduction of a mandate database. The Directive also requires Member States to ensure that the registration procedure for branches of companies governed by the law of another Member State can also take place entirely online. However, this did not require an intervention by the Belgian legislator as the BCAC already provides for this possibility.

Online establishment of certain types of companies

Before entry into force of the Company Law Digitalisation Act, founders (or their proxyholders) had to appear physically before the notary in case an authentic deed was required for the incorporation of such company. The new Directive, and its Belgian transposition act, introduce the ability for the notary to remotely execute authentic incorporation deeds in dematerialised form. The incorporation process will thus take place entirely online, through an electronic platform (more specifically through a video conference) that will be managed by the Royal Federation of the Belgian Notaries. The signing of the incorporation deed in dematerialised form is done by means of an electronic signature.

The online incorporation process is not available if (i) it involves a contribution in kind, or (ii) if the notary suspects that identity fraud is being committed or physical appearance is necessary to verify compliance with the rules regarding the party's legal capacity or its authority to represent the legal person on whose behalf it is acting.

The Directive includes a list of types of companies for which Member States have the obligation to introduce the possibility of online incorporation. Although the Belgian legislator was only required to provide this possibility for the private limited liability company (besloten vennootschap/société limitée), it was introduced for all types of companies that require an authentic instrument for their incorporation, such as the public limited company (naamloze vennootschap).

When a company is established through the electronic platform, the regular time limit of thirty days for the filing of the incorporation deed will be reduced and the incorporation will be completed within ten working days from the date of execution of the deed of incorporation and the payment of the publication costs. If a company is founded exclusively by natural persons who use the model for incorporation provided by the electronic platform, this time limit will be even further reduced to five days.

Creation of a mandate database

The Company Law Digitalisation Act supplements the existing Belgian articles of association database (which keeps all versions of the articles of association resulting from notarial deeds executed in Belgium) with a “mandate database”, in which the statutory delegations of the power to represent the legal person vis-à-vis third parties, their modification and their partial or total abolition must be filed. The creation of such a database should facilitate the consultation of this important data and the structured processing should allow for the smooth exchange between different registers and databases. The database is freely available and includes all company forms of which the articles of associations are filed in the articles of associations database.

At present, this information, which results from the statutory provisions, is available in the Annexes to the Belgian Official Gazette but is not available in a structured manner in the register of legal entities of the Crossroads Bank for Enterprises. This register only mentions the identity of the directors, but not the powers of representation that are part of the articles of association.

Entry into force

The provisions governing the online incorporation of companies as introduced by the Company Law Digitalisation Act entered into force on 1 August 2021. The obligation to deposit and maintain mandates in the “mandate database” has been in force (i) for the statutory provisions deriving from notarial deeds executed in Belgium, since 1 August 2021, and (ii) for the other deeds, on the day on which the part of the publicly accessible electronic database system applicable to them becomes operational. This date shall be published in a notice in the Belgian State Gazette. For those legal entities of which the existing statutory mandates have not yet been deposited and maintained, such deposit shall take place simultaneously with the next deposit of a new coordinated version of the articles of association.

1 Act of 12 July 2021 amending the Companies and Associations Code and the act of 16 March 1803 on the regulation of the notary profession and containing various provisions following the transposition of Directive (EU) 2019/1151 of the European Parliament and of the Council of 20 June 2019 amending Directive (EU) 2017/1132 with regard to the use of digital tools and processes in the context of company law.