To answer the growing concerns of new and young entrepreneurs, a new type of private limited liability company has recently been introduced under Belgian law[1], the BVBA-Starter / SPRL-Starter (or S-BVBA / S-BVBA).
However, it is only since the publication of the Royal Decree[2] determining the criteria governing the financial plan that it is possible to incorporate S-BVBAs / S-SPRLs.
This light capital vehicle aims at supporting young and new entrepreneurs with limited financial means to start their activity enjoying temporarily the advantages of limited liability, without having to meet the capital formation requirements linked to the incorporation of the ordinary private company with limited liability, i.e. the BVBA / SPRL. The provisions governing this new corporate form can be outlined as follows.
1. Who is considered to be a ‘new entrepreneur’?
Only (one or more) natural persons have the possibility to incorporate a S-BVBA / S-SPRL. Moreover, to ensure that the S-BVBA / S-SPRL remains exclusively reserved for persons whose entrepreneurial experience and/or financial means are limited, none of them may hold securities in other limited liability companies which represent 5% or more of the total amount of voting rights. In addition, the shares of a S-BVBA / S-SPRL cannot be transferred to legal entities, unless such a transfer is accompanied by a capital increase raising the S-BVBA’s / S-SPRL’s share capital to the minimum capital requirement of a BVBA / SPRL, notably EUR 18,550.
2. Lowered minimum capital requirement
The share capital of a S-BVBA / S-SPRL must range between EUR 1 and EUR 18,550. New entrepreneurs can therefore determine themselves the amount of share capital necessary to start their activities.
However, after a maximum of five years following the company’s incorporation, the founders must raise the company’s share capital up to the minimum amount of capital applicable to a BVBA / SPRL. Furthermore, the obligation to increase the company’s share capital also applies as soon as the S-BVBA / S-SPRL employs at least five full time workers.
3. Financial plan
The share capital amount must be justified in a financial plan drafted with the assistance of an organisation accredited by Royal Decree, a registered bookkeeper, a chartered accountant or an auditor.
In short, the financial plan must validate the means which the founders have foreseen in order to guarantee the company’s viability during the first two years of its existence.
This financial plan must meet certain ‘fundamental criteria’ which are determined by the aforementioned Royal Decree. It must at least contain the following elements: a description of the company, a projected balance sheet, a projected profit and loss account and a capital flow chart including charts of both the sources and the employment of the capital. Subsequently, these charts must be adjusted with regard to amortisation and depreciation, provisions for risks and costs and surplus values due to revaluation. These criteria are merely minimal criteria and the founders may decide to draw up a more elaborate financial scheme.
4. Protecting the company’s creditors
Several measures are provided in order to protect the company’s creditors against undercapitalisation or abuse of this new type of company:
- The founders’ liability resulting from going bankrupt within three years after incorporation remains intact;
- After three years following the incorporation date, the shareholders are held liable for any difference between the subscribed capital and the minimum capital of EUR 18,550;
- The obligation to build up a legal reserve has been increased considerably up to 25% of the annual net profit, when compared to the usual 5% required of a BVBA / SPRL. This commitment applies until the aggregate of the subscribed capital and the legal reserve amounts to EUR 18,550;
- The company must include the word ‘Starter’ in each mention of its legal form, as long as it has not been converted into a BVBA / SPRL.
5. Conversion into a BVBA / SPRL
The conversion of a S-BVBA / S-SPRL into a BVBA / SPRL – no later than five years after its incorporation date or as soon as the company employs five full time workers – shall be realised according to the common provisions governing the alteration of the articles of association and will be accompanied by a capital increase. This increase can be the result of an incorporation of the reserve fund.
[1]Wet van 12 januari 2010 tot wijziging van het Wetboek van Vennootschappen en tot vaststelling van de modaliteiten van de besloten vennootschap met beperkte aansprakelijkheid "Starter", B.S. 26 januari 2010.
[2]Koninklijk Besluit van 27 mei 2010 tot vaststelling van de essentiële criteria van het financiële plan van de besloten vennootschap met beperkte aansprakelijkheid "Starter", tot wijziging van het koninklijk besluit van 30 januari 2001 tot uitvoering van het Wetboek van Vennootschappen en van het koninklijk besluit van 22 juni 2009 houdende de nadere regels voor het inschrijven van niet-handelsondernemingen naar privaat recht in de Kruispuntbank van Ondernemingen, B.S. 31 mei 2010.
