What changes have been made in the CSA for directors?
What changes have been made in
the CSA for directors?
Who says CSA immediately thinks about the new rules for corporations. An LLC without capital, new rules on voting rights, a new definition of a cooperative society? But quite a few things have also changed for directors.
Conflict of interest
The new CSA contains a broad and above all stricter regulation of conflicts of interest within a company.
The first new feature is the duty to abstain: directors of SRL/BV, SC/CV and SA/NV can no longer take part in the deliberations or vote on a transaction in respect of which there is a conflict of interest. This was possible under the former Company Code (except for public limited companies).
In the event of a potential conflict of interest for all directors, the transaction must be submitted to the general meeting. If the general meeting approves the decision or transaction, the board of directors may execute it. The decision must also be submitted to the general meeting if there is only one director. Where that single director is also the sole shareholder, he may take the decision or carry out the transaction himself.
Caution: where there is a conflict of interest, the transaction or decision must (as before) be described in the minutes of the meeting in question. These minutes must be included in full in the annual report or in a document that is filed together with the annual accounts.
Where the sole director is also the sole shareholder, a special report must be attached to the annual accounts. This special report shall mention the agreements concluded between the director and the company.
If these rules are not complied with, the nullity of the decision may be requested by the company and by each party concerned.
These new rules also apply to the directors of SC/CV, ASBL/VZWs and foundations.
The new rules apply to directors of companies created after 1 May 2019. For companies already in existence on that date, they are applicable as from 1 January 2020, unless the articles of association of the company have been adapted to the new legislation before 1 January 2020.
Permanent Representative
Where the office of director is held by another legal entity, such legal entity director shall be represented by a permanent representative. Under the old Companies Code, this permanent representative must also effectively have a professional relationship with that company. The permanent representative had to be chosen from among the shareholders, directors, members of the board of directors or employees of the legal entity director.
This is no longer necessary. A third party can now be the permanent representative of a legal entity director.
On the other hand, it is no longer possible to appoint another legal entity as permanent representative.
Another new feature: in addition to the main permanent representative, it is now possible to appoint an alternate permanent representative. This alternate permanent representative can then act a) if the principal permanent representative is unable to act and b) if there is no other director.
The CSA provides for a double prohibition of cumulation for permanent representatives. A natural person may no longer sit on the board of directors under a double hat, i.e. on the one hand as a permanent representative and on the other hand as a director.
Furthermore, a natural person may also not be the permanent representative of several legal entity directors within the same company. However, it is still possible to be a permanent representative several times, each time in a different company.
Finally, it should be noted that the rules on conflicts of interest for directors apply not only where there is a conflict of interest with respect to the director-corporate body, but also in the event of a conflict of interest with respect to the permanent representative himself (i.e. without the director-corporate body itself being in a conflict of interest situation).
Directors are members of staff
What does not seem to be a huge intervention can sometimes be one despite everything: by including directors under the notion of "staff", many provisions of company law become with certainty applicable to directors. This mainly concerns transactions with shares (capital increase, repurchase of own shares, granting of subscription rights...) to which a special procedure applies depending on whether the transaction in question is intended for staff or not.
The following are therefore considered to be personnel:
natural persons engaged in the links of an employment contract or a management contract with the company (or with its subsidiaries) ;
legal persons who are bound by a management contract with the company (or its subsidiaries) (at least if these legal persons are represented by a single natural person who is also the partner or controlling shareholder);
the members of the board of directors of the company or its subsidiary(s), including legal persons whose permanent representative is also the controlling associate or shareholder.
This definition of "staff" applies only to books 5 (SRL/BV), 6 (SC/CV) and 7 (SA/NV). The size of a company (micro, small or large) depends, among other things, on the number of staff members. However, this provision appears in Book 1 of the CSA and explicitly refers to the number of employees in the Dimona declaration.
In this respect, let us add that the director, as before, is subject to the social status of self-employed workers. The CSA, however, also allows an employment contract to be concluded with this director, provided that this employment contract is not linked to the director's mandate. In this case, the director remains subject to the status of self-employed persons for his mandate as director, either in a principal or complementary capacity.