Search

In 2019, the Belgian legislator introduced a revised regime on directors’ liability in a new Companies and Associations Code (“CAC”). In the context of that new regime, he opted to not only target formally appointed members of a governing body, but also so-called de facto directors. They are defined in Article 2:56 CAC as “all other persons who have or have had actual governing power with regard to the legal person”. Article 2:56(1), first sentence CAC stipulates that they, like their formally appointed counterparts, are liable for errors committed “in the performance of their mission”. Article 2:143 CAC further stipulates that legal claims for actions undertaken “in relation to their task” are, just like legal claims against formally appointed members of a governing body, time-barred after five years. This normative approach is quite remarkable. After all, doesn’t de facto governance require a de facto interference, independent of or beyond any mission or task? The intervention of the Belgian legislator is conceptually far from clear. Therefore, the following central research question was formulated: “What is the exact scope of the CAC provisions concerning the de facto director and did the legislator do right by introducing these provisions?”. The research shows that different views have emerged in legal doctrine on the exact scope of the provisions (notably on the practical application to the de facto director of the aforementioned Articles 2:56 and 2:143 CAC, as well as Article 2:57 CAC (the cap on liability), which is closely related thereto). Despite this controversy, the legislator was not wrong to introduce them in the CAC. A comparative legal analysis reveals that norms or provisions on de facto governance in general company legislation fulfil, or can fulfil, an important preventive function (i.e., they have a dissuasive effect). In the current text of the CAC, this function is largely absent. A number of substantive proposals for amendments to the text of Articles 2:56, 2:143 and 2:57 CAC are made to address this issue. For some CAC provisions that, at present, clearly do not apply to the de facto director (notably Article 2:58 CAC (the ban on exoneration or indemnification) and Articles 5:104, 6:89 and 7:157 CAC (the derivative claim), the recommendation is to also extent their scope of application to the de facto director.

This country report contains a high-level analysis of the Belgian legal system for use by foreign legal practitioners and other interested actors. It is part of the Doing Business in Europe series, an authoritative, easy-to-follow guide to the legal systems of Europe, providing essential legal information for European businesses and their advisers.

This country report contains a high-level analysis of the Belgian legal system for use by foreign legal practitioners and other interested actors. It is part of the Doing Business in Europe series, an authoritative, easy-to-follow guide to the legal systems of Europe, providing essential legal information for European businesses and their advisers.