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Company forms

Types of company forms

Choose the company form that suits you

As a self-employed person you can choose between a sole proprietorship or a company If you put financial security first, you are better off with a company. However, which one: a private limited company (bv, formerly bvba) or straight away a public limited company (nv)? 

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Types of company forms
Pros and cons of the following types of company forms

What are company forms?

A company form has a number of pros and cons, but setting up a company involves more work than for a sole proprietorship.

Definition: A company is set up by a contract pursuant to which two or more persons agree to put something in common with a view to carrying on one or more precisely defined activities, and with a view to providing the partners with a direct or indirect share in the assets. The company has its own rights and obligations and thus has legal personality and may take various forms.

The legislation was thoroughly reformed in May 2019, making it simpler for everyone. However, there are still numerous options.

Types of company forms

One of the biggest reforms is the drastic reduction in the number of company forms. There are still five basic forms:

  • Private limited company (BV)
  • Public limited company (NV)
  • Cooperative company (CV)
  • Partnership
  • Companies with unlimited liability, such as a general partnership (VOF) and an ordinary limited partnership (Comm.V.) 

For the sake of completeness, in addition to these basic company forms, a number of lesser-known forms remain: the European Economic Interest Grouping (EEIG), the European Company (EC) and the European Cooperative Society (ECS). These are company forms that arise from European legislation and therefore cannot simply be adapted by the Belgian authorities. In reality, however, you rarely come across them.

Which one you choose depends on your objectives and expectations. The choice of a specific company form does have a major impact. So be sure to discuss this with your notary, your bookkeeper and your Securex business coach.

Private Limited Company (BV)

The BV - formerly bvba - is one of the most popular company forms. Since the reform, you can set up a private limited company on your own and there is no longer a minimum capital requirement, which has made it even more popular. However, you must have sufficient initial capital, make a financial plan and also have a notarial deed drawn up.

The name 'private limited company' refers to the fact that you have fewer possibilities to transfer shares. [And even if it’s no longer in the name] Also, with a BV your liability is limited and you are better protected against potential creditors. 

Do you still have questions about this company form? Ask all your questions here.

Public Limited Company (NV)

A second well-known form of company is the Public Limited Company (Naamloze Vennootschap (NV)), usually used by and associated with larger companies. 

Unlike a private limited company, the capital contribution works differently: shares are freely transferable, the emphasis is on anonymous raising of capital. Anonymous, because in this case the partners remain out of the picture and their liability is limited to their contribution.

An NV may also have only one shareholder or partner. In any case, 61,500 euros of initial capital must be provided, each share paid up to at least one quarter. 

Would you like to set up a limited liability company? Then you must...

  • Provide a financial plan
  • Arrange for a notarial deed of incorporation 
  • Create a shares register for registered shares 
  • Designate a board of directors with at least 3 directors (or a dual board) 
  • Provide double-entry bookkeeping 

The NV is therefore a less flexible company form and mainly concerns larger companies.

Contact us for more information on this company form.

Cooperative Company (CV)

As the name suggests, this company form is suitable for working with a number of partners while limiting liability:

  • The partners are only liable for the amount of their contribution. 
  • Joining and leaving is easy. New partners join by subscribing for new shares. 

Concretely:

  • You need a minimum of 3 partners 
  • There is no minimum capital requirement, but (as with a private limited company) you must demonstrate in your financial plan that you have sufficient initial capital to bridge the first two years. 
  • Shares are registered and freely transferable; a share register is required. 
  • You will also need a notarial deed of incorporation. 

Heeft u nog vragen over deze vennootschapsvorm? Ask all your questions here

Partnership

Since the Companies Act reform (May 2019), partnerships are also companies. This is an agreement between at least 2 (legal) persons to run a company together or to own something jointly. The 'partners' contribute money, work or goods and distribute the profits among themselves.

A partnership has a number of advantages:

  • It’s easy to set up and dissolve. 
  • A private contract suffices, so no need to involve a notary or submit statutes. 
  • You decide how to distribute profits. 

Possible disadvantages are:

  • Liability is unlimited, so the partners are less protected. 
  • Shares cannot simply be transferred; the other shareholders must agree. 

A partnership has no legal personality and no equity. With (incomplete) legal personality, a partnership becomes a general partnership (VOF) or an ordinary limited partnership (Comm.V.).

Contact us for more information on this company form.

Choose the company form that suits you

Which one you choose depends on your objectives and expectations. Perhaps you are better off with a sole proprietorship. In any case, discuss your choice with your accountant and/or notary. 

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