Transformation of SPRLs into SRLs

In Belgium, new legislation concerning limited liability companies (SRLs) came into force on 1 January 2020. This law requires existing private limited liability companies (SPRLs) to convert into SRLs by 1 January 2024.

This obligation follows the adoption of the law of 23 March 2019, which amended the 1999 company law. The purpose of this reform is to modernise company law in Belgium, simplify administrative formalities and strengthen the rights of shareholders and creditors.

Converting an SPRL into an SRL is a relatively simple procedure, but it must be carried out carefully. The conversion requires an amendment to the company's articles and therefore an appearance before a notary.

There are many advantages to converting into an SRL. First, the SRL offers shareholders greater flexibility and freedom in organising the management of the company. It also allows different types of shares and bonds to be created, which can make it easier to raise finance for the business. In addition, the SRL offers greater protection to creditors and third parties if the company becomes insolvent.

However, it is important to note that converting into an SRL can have significant tax and accounting consequences for the company. Shareholders should therefore seek advice from a chartered accountant before proceeding with the conversion.

It is also important to note that conversion into an SRL is compulsory for existing SPRLs. Companies that fail to comply with this obligation may face administrative and criminal penalties, including fines and the dissolution of the company.