The Act of 19 March 2012 adapting the Companies Code provides for a simplified liquidation procedure, which allows a company to be wound up and liquidated in one single notarial deed. The Minister of Justice has now taken a pragmatic approach to deal with the uncertainty that had arisen on the notion of “absence of liabilities”.
1. Legal conditions
Pursuant to article 184, § 5 of the Companies Code, the winding-up and liquidation of a company in one single notarial deed is subject to the following cumulative conditions:
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no liquidator has been appointed;
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there are no liabilities reflected in the balance sheet referred to in article 181 of the Companies Code; and
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all shareholders are present or represented at the general meeting and unanimously approve the winding-up and liquidation in one single deed.
The second condition, being the absence of liabilities, causes some uncertainty with respect to the interpretation of this notion.
2. Interpretation of the notion of “absence of liabilities”
The Minister of Justice has recently been questioned hereon in the relevant commission of the Chamber of Representatives. Indeed, a strict interpretation would make the simplified procedure almost impossible. The Minister announced that the Act would be clarified. Meanwhile, it is useful to examine the view of the Minister in further detail.
The Minister confirmed that “capital” and “reserves”, although these are items of the liabilities side of the balance, are not considered and therefore do not prevent a simplified liquidation. This view was already generally accepted, and no reasonable person will dispute this.
According to the Minister, the liquidation costs themselves do not prevent the simplified liquidation either. This is less obvious. Under the standard accounting rules, a provision must be booked for these costs (e.g. the fees for the notary or the statutory auditor) on the liabilities side of the balance sheet. Until the Act is adapted, it is unlikely that a notary would accept the simplified liquidation if such provision appears on the liabilities side. A possible solution is to already settle these costs before the winding-up and liquidation. Another solution, in particular if the relevant company belongs to a group, is to have these costs borne by the parent company.
The liabilities side normally also contains debts. According to the Minister, the Act must be interpreted in the sense that only debts towards third parties prevent the use of the simplified procedure. Debts of the company towards its shareholders shall thus in principle not be an obstacle to the simplified liquidation.
The Minister further confirmed that the condition of the absence of liabilities is also met if the debts towards third parties are settled after the drawing up of the balance sheet but before the winding-up. Please note that the notary will require the necessary evidence in this respect.
The aforementioned article 181, which imposes to draw up a balance sheet, applies to the most common legal forms (a.o. NV/SA and BVBA/SPRL). The Minister confirms that the simplified liquidation procedure can also be used by company forms that are not required to draw up such balance sheet. However, in practice it shall probably be advisable that these companies voluntarily draw up a balance sheet in order to prove that they indeed do not have any debts towards third parties.