10 October 2023

New central register for disqualifications

by Wannes Gardin

On 1 August, the new legislation regarding a central register for disqualifications came into effect. In the past, disqualifications issued by the courts often seemed to fail to achieve their purpose as there was no suitable follow-up mechanism. The central register is intended to change this situation and ensure that disqualifications are properly monitored and tracked.

What is a disqualification?

Disqualified directors are not permitted to hold a role as a manager, director, statutory auditor, executive director, member of a supervisory committee, board of directors or supervisory board, liquidator for a legal entity or representative of a company or association for a specified period between 3 and 10 years. Disqualifications of this kind can be issued by criminal courts or under corporate law, and are usually issued in cases of bankruptcy or gross negligence in management of a company.

Central register

At present, disqualifications are established in court rulings and published in the Belgian Official Gazette. However, there is no structured monitoring system in place to ensure compliance with the rulings. In other words, in practice, directors who have been disqualified can simply ignore the ruling and continue to carry on with what they were doing.

The European Union has now issued a new directive intended to tighten up this system. Every member state must maintain a central register containing details of disqualifications. Specifically, this must be an online database that can be accessed by court registries, notaries, and the police. In fact, all citizens must also be able to access the database, albeit only certain data. The idea is that all member states will have access to the national central registers, and can easily check whether another EU state has already issued a disqualification.

New requirements

The new central register of disqualifications is intended to simplify access to information and it will be obligatory to search it when establishing a company or appointing company executives. Companies and associations will be required to draw up and sign an accompanying declaration stating that no disqualifications have been issued by a court in Belgium or another country. The corporate law courts have already produced a standard declaration. This must now be submitted to the court registry when appointing an authorised representative to a company.

It is evident that this new regulation will introduce additional complications to the already somewhat intricate formalities associated with appointments and publication of appointments. Our specialists will be happy to help you ensure you comply with the new requirements. 

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