What legal form suits me best?
Veröffentlicht am 02/06/2020 in Start Like A Pro
In 2019 the Belgian government weeded out a number of associations and companies. Today six legal forms remain that can be used to run a business in this country. But how can you tell which is the ideal legal form for you?
Do you know all of them? The six basic forms listed in the Belgian Code of Companies and Associations (BCCA)? You don’t? Well, there’s the partnership, the general partnership (VOF), the limited partnership (Comm.V), the private limited liability company (BV), the cooperative company (CV) and the public limited liability company or joint-stock company (NV).
The main difference between all these legal forms is their limited or unlimited character and the degree of legal personality. Come again?
All companies are juridical persons
In other words, like a natural person companies have rights and obligations. However, some juridical persons are more practical than others to shield your private assets from the enterprise. Suppose your worst nightmare comes true and your business goes downhill then no one will come knocking on your door. Only the company’s assets are at risk.
Based on the above criteria a distinction is made between:
1. Companies without legal personalities
A partnership is a company without legal personality so a partnership does not have any right or obligations and cannot act as an autonomous legal entity. Its liability is unlimited.
2. Companies with limited legal responsibility
A general partnership (VOF) and a limited partnership (Comm.V) have limited legal responsibility. They can act autonomously but their liability is unlimited. Both the company and its partners can be held liable for the company’s debts.
3. Companies with unlimited legal responsibility
The public limited liability company (NV), the private limited liability company (BV) and the cooperative company (CV) are legal forms with unlimited legal personality. The company is a legal entity and can be a party to legal proceedings. Moreover, limited liability applies. Partners cannot lose more than what they put in so their personal assets are safe.
Oh, my company protects me so does that mean I can throw money around as an entrepreneur? No, unfortunately. If the court decides that the manager is responsible for the bankruptcy of a business, he can be forced to foot the bill.
You’ve made up your mind? Then have your articles of association drawn up by an expert (lawyer, accountant, notary public...).
Good luck with your brand-new company!!
Source: UNIZO
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