20 February 2024

From CV to BV: Pay attention when there are changes in shareholding

by Charlotte Humblet and Rob Corten

After the introduction of the Companies and Associations Code (CAC), many businesses, including liberal professions, opted to transition from a cooperative company (CV) to a private limited liability company (BV). Although the gap between these two types of companies has significantly narrowed, there are still important differences. This article focuses on changes in the shareholding.

The transition from the so-called 'improper cvba/scrl' (cooperative company with limited liability) to other legal forms follows the legislator's vision of reserving the CV (cooperative company) for companies with a distinctly cooperative finality. By way of compensation, another legal form had to accommodate entrepreneurs whose activities were no longer compatible with the definition of a CV (cooperative company). This was done by adding to the originally rigid BVBA (private company with limited liability) a whole range of options inspired by the popular CVBA (cooperative company with limited liability).

Private nature

The popularity of the CVBA/SCRL was due in part to its flexibility and discretion. Shareholders could join and leave the company easily, and internal agreements could be laid down in internal regulations without being disclosed publicly.

Currently, the BV is a legal form that allows entrepreneurs a lot of room to deviate from standard rules in their articles of association. However, there are some mandatory rules regarding changes in shareholding that must be taken into account. After all, the BV is a private limited company and this private nature remains the starting point.

This feature is a key difference from the CV. In a BV, the number of shares must be stated in the articles of association. Any change in this regard requires an amendment to the articles of association, which in turn requires a notarial deed. This occurs when there is an exit on behalf of the corporate assets or when new shares are issued.

If several changes take place in one year, this would mean several visits to the notary, which in turn would lead to higher notary fees. An example is a medical association where a doctor retires and in the same year, two new doctors join the practice. In this case, the articles of association in a BV (in a default situation) would have to be amended each time. This is not very efficient, leading to some nuance being added to the above principle.

Delegation of power

As mentioned above, in addition to its 'standard' version, the BV also has several options at the level of the articles of association. Normally, the general meeting is authorised to issue new shares, but it can also temporarily delegate this power to the board of directors. Of course, this delegation, in addition to an amendment to the articles of association, requires compliance with other regulations.

Once the delegation has been implemented, the law allows a delay in amending the articles of association. However, delay here does not mean cancellation.

Before the end of each financial year, changes in shareholdings must be recorded by a notary. This arrangement reduces the number of deeds in this area to just one. This results in significant efficiency gains, but it is not a complete equivalence to the CV arrangement.

It is important to note that this simplification only applies to BVs where there is a delegation of power. In the standard BV, where the general meeting decides, the situation is different. Apart from the mandatory notarial amendment to the articles, you must consider the following elements:

  • The proportional preferential right of existing shareholders;

  • Obligation of the board to prepare a report on the issue price;

  • Prior payment of the contribution to a blocked account (for cash contributions with effective full payment).

In general, the BV offers flexibility, but there are limits when it comes to changes in the number of shares. You cannot completely avoid the notary visit. However similar the BV may be to a CV, they are related rather than identical.

A vigilant entrepreneur is certainly worth two.

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