The Belgian Company Code was renewed in 2012 and a new simplified procedure was approved for company liquidation. The new Act allows company dissolution and liquidation in one step (“en un seul acte”/”in één akte”). According to the commercial code the liquidation of a Belgian company is the following step after a company was dissolved. The liquidation procedure in Belgium includes selling a company’s assets and paying the company’s debts. If any amount of money remains, it will be divided between the shareholders according to the law or Articles of Association of the company.
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Legal requirements for company dissolution in Belgium
Company dissolution in Belgium is possible only under the following circumstances:
- If the duration of the company has reached its end according to the Articles of Association;
- If a judge rules for the dissolution of the company, a liquidator will be appointed to carry out the procedure;
- If the general meeting of the shareholders decided to dissolve the company and the Articles of Association were modified to this purpose.
The resolution to dissolve a company is the first step for company liquidation in Belgium.
| Quick Facts | |
|---|---|
| Reasons for company liquidation in Belgium | The company can no longer make payments or has lost its creditworthiness, etc. |
| The effects of company liquidation | The company ceases to exist. |
| Voluntary company liquidation in Belgium | Yes |
| Compulsory winding up | When requested by the creditors |
| Reasons for compulsory company winding up in Belgium | The company is bankrupt, with no option for reorganization, etc. |
| Voluntary winding up steps | Convene a shareholder’s meeting, appoint a liquidator, liquidate the assets, prepare the liquidation report, close the liquidation. |
| Compulsory winding up steps | A third party files for bankruptcy with the Commercial Court, the bankruptcy judgment is issued, the receiver is appointed. |
| Business activities during voluntary dissolution | Only as needed to sell the assets and pay the debts. |
| Activities that cannot take place during liquidation | Continued trading. |
| The liquidator’s role | The liquidator sells the assets and pays the debts towards creditors. |
| Director’s powers | Prepare the special report that justifies the proposal to liquidate and dissolve the company, convene the meeting. |
| Director’s duties | Aid in the process of liquidation |
| Creditor’s duties | Initiate the process, as needed to recover their debts |
| Alternatives to winding up the company | Corporate restructuring, if possible. |
| Liquidation process duration | Company dissolution and liquidation is possible in one day, however, only in special cases. The process is longer in most situations. |
The procedure for company dissolution in Belgium
The general meeting of the shareholders can make public the company dissolution only after some conditions are met:
- The director of the company has drafted a report that explains the reasons for dissolving the company. Liquidating a company in Belgium happens after approving the liquidation resolution;
- An auditor or an outside accountant has drafted a financial report stating the company’s assets and liabilities (according to the Belgian commercial code the term “liabilities” represents a company’s debts in the liquidation process); the report cannot be older than three months;
- All the documents the company releases must state that the company is in liquidation.
If these requirements are met, the Commercial Court will then appoint one or more liquidators. They must pay the company’s debts and divide the remaining assets among the company’s shareholders.
The simplified procedure for company liquidation in Belgium
According to the new Act, the simplified procedure for company liquidation is possible only if:
- No liquidator was named;
- The company has no liabilities and was dissolved;
- All the shareholders participated when the decision for company dissolution was adopted;
- The general meeting of the shareholders unanimously decided the dissolution and liquidation of the company;
- The remaining assets after paying the debts of the company were divided among the shareholders.
Our lawyers in Belgium can offer more details about the simplified procedure. We also invite you to watch a video about this process:
Liquidator duties and obligations
The liquidator plays an important role in winding up a company in Belgium. He/she is responsible for managing and selling the company’s assets. He/she must also identify and settle the company’s debts and liabilities. The liquidator pays off creditors from the proceeds of asset sales. After paying creditors, the liquidator distributes any remaining funds to the shareholders.
Throughout the company liquidation process, the liquidator must provide regular reports to the Commercial Court and shareholders.
The liquidator remains liable for his/her actions and decisions for five years after closing a company in Belgium.
Our Belgian lawyers can act as liquidators.
Judicial reorganization and involuntary company liquidation
Judicial reorganization is an alternative to closing a company in Belgium. It is a legal process aimed at helping a struggling company continue its operations under court supervision. The company must file a petition with the Enterprise Court. The company will then be considered in a mini-suspension, which prevents the company from being declared bankrupt. During the mini-suspension, creditors are prevented from taking legal action to seize or sell the company’s assets to recover debts.
There are three main types of judicial reorganization: amicable settlements, collective agreements, and the transfer under judicial authority. Our attorneys in Belgium can explain more about these processes if you are interested.
Involuntary company liquidation in Belgium is initiated by creditors or other third parties. If they believe the company can no longer maintain business continuity, they can request the court to terminate any ongoing judicial reorganization proceedings. If the court agrees, it may declare the company bankrupt or force it into judicial liquidation proceedings. If the company is not under judicial reorganization, creditors can directly file a writ of summons with the Enterprise Court to place the company into bankruptcy. This is a complex procedure for winding up a company in Belgium.
Statistics about bankruptcy in Belgium
Regarding the subject of closing a company in Belgium, our team has prepared the latest statistics about the number of bankrupt companies in the country, as of August 2024:
- 436 bankruptcies were registered, a substantial decrease of 39.5% compared to July 2024;
- 273 bankruptcies were registered in the Flemish region;
- Construction companies saw the highest number of bankruptcies for August, with 117 bankruptcies;
- 89 bankruptcies were registered in the trade sector.
Our team can recommend our partner accountants in Belgium if you need tax-related assistance.
If you want details about the liquidation procedure of a company or need legal advice in litigation cases you can contact our law firm in Belgium. Our team can also help you set up a company in Belgium.