The term “liquidation” denotes the financial realization of all of the company’s assets as well as the liquidator’s clearance and payment (if feasible) of all outstanding obligations (i.e., liabilities). If any money remains after this process, it must be distributed among the shareholders by the terms of the articles of the organization. At a one-stop business counter, the company’s operations can then be put to a final, conclusive end. The business court is a watchdog that the legislator has established to oversee the proceedings for dissolution and liquidation. In 2012, the Belgian Company Code was updated, and a new, more straightforward method for company liquidation was adopted. The new Act permits simultaneous corporate dissolution and liquidation). The commercial code states, The next stage once a corporation has been dissolved in Belgium is for it to be liquidated. In Belgium, the liquidation process is defined as the process by which one or more liquidators liquidate a company’s assets, pay off the company’s obligations, and, if any money is left over, divide it among the shareholders by the company’s bylaws or articles of association.
Belgian legal prerequisites for company dissolution
In Belgium, a company may dissolve only in the following situations:
- When the company’s lifespan has ended by its articles of association.
- When a judge has ordered the dissolution of the company.
- When a general meeting of shareholders has decided to dissolve the company; and when the articles of association have been changed to reflect this decision.
In Belgium, dissolving a business is the first step in the liquidation of a company.
The company’s stockholders want to shut it down. Reducing costs and shutting the business more quickly, can be accomplished with a single deed witnessed by a notary. This streamlined process typically costs 4,000 Euros. With the first notary deed (which will cost approximately 2,200 Euros in the context of dissolution through many deeds), the company will begin its liquidation period. A liquidator will then be appointed to manage the liquidation. Before taking any action, the commercial court must authorize this liquidator. When his task is complete, he submits the closing accounts to the commercial court for approval, and a new notarized document permits the liquidation to be closed (approximate cost of 1,800 Euros). After the liquidation is over, the corporation remains a passive legal entity for five years, allowing creditors to still contact the liquidator.
Liquidation and legal dissolution
The court issues a decision dissolving the business. This could be requested by a holder of a right (such as a shareholder) or by the royal prosecutor (for example, because the company has not filed its annual accounts for three consecutive years).
Dissolution and liquidation
A company is automatically dissolved when one of the following conditions is met:
It was founded for a brief length of time.
One of the conditions in its articles of association was satisfied (e.g. a clause can be inserted in the articles of association stipulating that the company will be dissolved automatically upon the death of the sole shareholder).
Several requirements must be met by businesses that have received funds from the Brussels-Capital Region. Investments related to these grants must therefore be held for a minimum of three years and a maximum of six years. The amounts received must be returned if these responsibilities are not met. Belgium’s streamlined company liquidation process
The new Act states that the streamlined process for corporation dissolution is only feasible if:
- No liquidator was appointed.
- The company was dissolved and has no liabilities.
- All of the shareholders were present when the decision to dissolve the company was made.
- The general meeting of shareholders unanimously decided to dissolve and liquidate the company.
- The shareholders divided the remaining assets following the payment of the company’s debts.
