Mandatory amendment of articles of association of companies: time is running out!
Mandatory amendment of articles of association of companies: time is running out!
May 2023 – As a result of new company legislation, which came into force in 2019, all existing companies have to amend their articles of association by 1 January 2024. This obligation causes resentment among a lot of entrepreneurs, as it creates additional costs. Nevertheless, you can look at this measure as an opportunity - and thus valuable investment...
Basic rules refreshed
On 1 January 2020, the new Companies and Associations Code (WVV) came into force. The legislator drastically cut the number of company forms, with four remaining forms: the private limited company (bv), the public limited company (nv), the cooperative society (cv) and the partnership.
Abolished legal forms must switch to another legal form. The government designated a prescribed legal form for this purpose. A company that chooses to use such prescribed legal form can do so with an ordinary amendment to the articles of association.
But a company can also opt for a legal form other than the prescribed one. In that case, a special procedure applies, including a special report by the board, a statement of assets and liabilities and a report by an auditor or certified external accountant.
Resentment over extra charges...
Interestingly, only a minority of companies have currently amended their articles of association. So this year could be very busy for notaries, especially for an amendment of the articles of association of private limited companies, public limited companies and limited partnerships. And such a visit obviously comes at a price. And that in turn causes resentment among a lot of entrepreneurs, because changes for typical management companies, companies of liberal professionals and patrimony companies are only technical in nature.
... or rather an investment in the future?
Yet specialists suggest viewing this obligation not so much as an unnecessary cost, but rather as a useful moment of reflection and an investment in the future of your company. Indeed, in the context of adapting the articles of association to the new WVV, it is very useful to reflect on questions such as:
Is the current structure of your company still adapted to today's needs?
Have you put all agreements with co-shareholders clearly on paper?
What about the continuity of your company if you were to fail? For example, what about a healthcare proxy where the interaction with the articles of association is very important.
Quid exit strategy or succession planning?
An answer to these questions will provide peace of mind and comfort, both for yourself and your employees.