Abstract
The most distinguishing feature of the cooperative in Belgium, compared to other company forms, is its variable capital share. Furthermore, this company structure caters for many tastes: for those wishing to use the structure for its legal flexibility, it offers the possibility to work with multiple voting rights, with different kinds of partners linked to different rights. For those with rather more idealistic aims, keeping the cooperative idea firmly in their minds, there is a wider scope for made-to-measure opportunities. Over the years, the Belgian legislator tried to find ways to focus more on the ideals and principles of cooperative entrepreneurship. Those who give preference to the true cooperative principles can turn to the National Council for Cooperatives' accreditation. The cooperative company, in combination with the social purpose label, also provides an interesting opportunity for founders who are looking for a legal vehicle with a wider social purpose. In this chapter the flexible cooperative law in Belgium, facilitating the freedom of founders, will be analyzed.
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Notes
- 1.
Law 18 May 1873, Belgian Official Gazette, 25 May 1873.
- 2.
Law 20 July 1991, Belgian Official Gazette, 1 August 1991.
- 3.
Known in Belgium as the coöperatieve vennootschap met beperkte aansprakelijkheid or CVBA (in Dutch) or the société coopérative à responsabilité limitée or SPRL (in French).
- 4.
This legal form was known in Belgium as the coöperatieve vennootschap met onbeperkte hoofdelijke aansprakelijkheid or cvoha (in Dutch) or the société coopérative à résponsabilité illimitée et solidaire or SCRIS (in French).
- 5.
Known in Belgium as the coöperatieve vennootschap met onbeperkte aansprakelijkheid or CVOA (in Dutch) and the société coopérative à responsabilité illimitée or SCRI (in French).
- 6.
Nationale Raad voor de Coperatie (in Dutch) or Conseil National de la CoopÕration (in French). Law 20 July 1955, Belgian Official Gazette, 10 August 1955. The accreditation conditions were officially introduced by Royal Decree in 1962. Royal Decree 8 January 1962, Belgian Official Gazette, 19 January 1962.
- 7.
In the National Council for Cooperatives, the cooperatives are grouped according to their activity sector: consumer cooperatives, agriculture cooperatives, production and distribution cooperatives and service cooperatives. The National Council for Cooperatives consists of a general assembly (which convenes at least once a year) and a board (with maximum 20 members and where all members have equal voting rights). Maximum three permanent commissions can be formed by the general assembly or the board, to prepare proposals or to analyse specific problems. Temporary commissions can also be formed. See Art. 2–4 Law 20 July 1955, Belgian Official Gazette, 10 August 1955.
- 8.
See also the Council’s website: http://economie.fgov.be/nl/ondernemingen/leven_onderneming/oprichting/structuur/vennootschapsvormen/Cooperatieve_vennootschappen/Erkenning/. For a list of cooperatives that had their accreditation renewed for a period of 4 years (until 31 May 2015), see the Ministerial decree 1 July 2011, Belgian Official Gazette, 8 July 2011.
- 9.
Vennootschap met sociaal oogmerk or VSO (in Dutch); Société à finalité sociale or SFS (in French). Law 13 April 1995, Belgian Official Gazette, 17 June 1995.
- 10.
The European cooperative company will remain beyond the scope of this article.
- 11.
The European cooperative company will remain beyond the scope of this article.
- 12.
Naamloze vennootschap or NV (in Dutch), Société Anonyme or SA (in French).
- 13.
Besloten vennootschap met beperkte aansprakelijkheid or BVBA (in Dutch), Société privée à responsabilité limitée or SPRL (in French).
- 14.
Compare with the Belgian association, which is defined in article 1 of the association and foundation law 27 June 1921, as an organization that “does not conduct industry or trade and that does not distribute material benefits to its members.” It must therefore function without the intention of personal gain and cannot practice acts of trade. Acts of trade are stipulated in articles 2–3 of the Commercial Code (10 September 1807).
- 15.
NCC newsletter nr 5, April 2009, 2.
- 16.
NCC newsletter nr. 10, February 2011, 4.
- 17.
NCC newsletter nr. 3, June 2008, 2.
- 18.
Except in the case of a merger, division or conversion. See articles 698 §2, 711 §2 and 721 §2 Company Code (merger), articles 735 §2 en 750 §2 Company Code (division) and article 781§6 Company Code (conversion).
- 19.
Du Faux (1994), p. 84.
- 20.
An example of a legitimate reason is the case whereby one joint partner, against whom the divorce on grounds of adultery against the principal partner was pronounced. Via the company he performed a financial audit of his ex-spouse. This partner was no longer allowed to perform his normal tasks in the company (which consisted of accountancy and supplies to customers of medicines) without being subject to the constant, painful and frustrating contact with his ex-spouse. The court took into account the fact that this case concerned a typical family company. Court of Commerce Ghent 25 September 2001, Tijdschrift voor Gentse rechtspraak (Journal for Jurisprudence from Ghent) 2001, p. 343.
- 21.
Van Hulle and Van Hulle (1996), p. 114.
- 22.
The majority of legal doctrine would be of the opinion that this is not binding and that the articles of association can exclude any claim to the reserves. See Resteau (1936), pp. 211–212 and De Wolf (2005), pp. 32–33. Some legal doctrine is even of the opinion that this is the rule should nothing be mentioned in the articles (of association), although this seems rather extreme. See ‘t Kint and Godin (1968), pp. 143–144. See also Coipel (2009), p. 132. The NCC confirms the first opinion by claiming that either the articles of association can stipulate that the partners cannot claim their right on the reserves and the carried results, in which case the same system is applicable as for the SPC: repayment of the share capital at subscription value; Or the articles of association stipulate that the partners can claim the reserves and the carried results, or they do not make a mention of it, in which case the value, as per the balance, will be repaid to the withdrawing partner (NCC newsletter nr. 7, December 2009, 4).
- 23.
A small company is a company with legal personality that does not exceed more than one of the following criteria in the last (and one but last) financial year: annual staffing average: 50; annual turnover without VAT: € 7,300,000 ; total balance : € 3,650,000; unless the annual staffing balance is more than 100 (art. 15 §1 CC). In any other case, a company will be considered as being large.
- 24.
Royal Decree 8 January 1962, Belgian Official Gazette, 19 January 1962.
- 25.
See Art. 5 and 7 Royal Decree 8 January 1962, Belgian Official Gazette, 19 January 1962.
- 26.
See articles 179–182 Income tax code 1992.
- 27.
With the exception of the cooperative participation companies meant in the law of 22 May 2001 concerning employee participation in the capital and the profit of the companies, Belgian Official Gazette, 9 June 2001.
- 28.
Art. 17 and 18 of the law of 16 June 2006 on the public offering of financial instruments and access to financial instruments for trading on the regulated market. The Financial Services and Markets Authority (FSMA) has been preoccupied with several dossiers concerning the public offering of shares from cooperatives which have all the same social aim, namely to invest in projects for green energy and the supply of this energy to their collaborators. The question was if these cooperatives could be exempt from the prospectus requirement. Within the frame of these dossiers the FSMA considered that four conditions had to be met to be eligible for an exception: the cooperative offering the shares has to be acknowledged by the minister in charge of economic affairs; the public offering has to be based on shares from a cooperative; the members have to be able to use the services offered by the cooperative; the services of the cooperative have to be intended mainly if not solely for the members. Concerning the third condition more specifically, the FSMA clarified that the payment of dividends (fiscal advantage) to the members in itself is not sufficient to comply with the service provision condition. In the relevant dossiers, the FSMA already decided that the possibility to provide the members with green energy, supplied by a third party, can be considered as a service to the members. http://economie.fgov.be/nl/ondernemingen/leven_onderneming/oprichting/structuur/vennootschapsvormen/Cooperatieve_vennootschappen/Erkenning/Voordelen/.
- 29.
This amount dates back to 31 December 2010. Van Opstal (2012), pp. 2 and 7.
- 30.
See for more information Coates and Van Opstal (2009), 70 p.
- 31.
Recently, new Flemish legislation concerning Work Integration Social Enterprises (WISE's) was introduced, making the social purpose company an official option (next to the association) entitled to receive work integration subsidies. Decree 12 July 2013, Belgian Official Gazette, 2 September 2013.
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Acknowledgements
The author would like to thank Peter Bosmans (Febecoop), Marleen Denef (Curia Lawyers), Anneleen Steeno (Intui Lawyers), Lieve Jacobs (Coopburo) and Wim Van Opstal (CESOC University College Leuven), for helpful discussions and comments. All potential errors are the sole responsibility of the author.
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Coates, A. (2013). Belgium. In: Cracogna, D., Fici, A., Henrÿ, H. (eds) International Handbook of Cooperative Law. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-30129-2_10
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