Bv: everything you need to know
- The private nature refers to the fact that the company's shares cannot simply change hands. That way you know who you are working with at all times.
- A second aspect is the limited liability of shareholders. This liability is limited to their contribution to the company.
- Furthermore, a bv is a legal entity with legal personality, whereby you have a great deal of statutory freedom.
Liability in the case of a bv
As mentioned earlier, the shareholders' liability is limited to their contribution. This means that, in principle, creditors cannot claim your private assets. However, it’s important to note that there is such a thing as ‘founder's liability
Founder's liability
Under the new legislation, you no longer have to contribute a fixed amount as start-up capital when setting up a bv. However, you do have to determine, on the basis of a financial plan, how much money you will need to bridge the first two years.
And you must actually contribute that amount. If your company goes bankrupt within a period of 3 years after its incorporation and the initial capital was clearly insufficient, you can still be held personally liable, as founder, for (part of) the shortfall.
Tip: Always have your financial plan drawn up or checked by an expert.
Advantages and disadvantages of a bv
Go to the overview of the different company forms to obtain more information about the advantages and disadvantages of all company forms. They are briefly set out again here.
Advantages of a bv
- Shareholders are only liable to the extent of their contribution.
- In theory, the start-up capital could be €1.
- The profits of a private limited company are subject to corporation tax, which is much more advantageous than personal income tax (applicable to a sole proprietorship).
- There are more options to efficiently manage your taxation.
- You can set up a bv on your own, but also together with others.
- In principle, shares are not freely transferable, but it’s possible to derogate from this in your articles of association. The articles of association can also regulate other matters, such as the voting rights of shares.
Disadvantages of a bv
- You must consult a notary before incorporation
- Incorporation costs are relatively high
- You must draw up a financial plan
- You are required to keep double-entry bookkeeping
- The liquidation cost of a bv is a lot higher than e.g. for a sole proprietorship.
Setting up a bv: a step-by-step plan
A bv is a limited liability company. That way, you are better protected against potential creditors, but it also means that stricter conditions apply to setting up a bv.
Let’s go over the five steps:
- Consult a notary
- Draw up your financial plan
- Have an auditor draw up a report
- Arrange your company and VAT number via a Securex business counter
- Join the Securex Social Insurance Fund
Do you want a tailored step-by-step plan?
Put together your personal step-by-step plan.
Consult a notary
A notarial deed is required for incorporation. For this, you will pay approximately €1,000 in notarial costs (excluding VAT). These costs already include registration duties and the deed drafting tax.
An excerpt of your deed of incorporation must also be published in the Belgian Official Gazette, for which you pay around €250 to the registry. In most cases, however, your notary will arrange this for you.
Draw up your financial plan
Most entrepreneurs have their financial plan drawn up by an accountant. As a guideline price, you might want to keep €800 in mind, although that depends entirely on your accountant, the complexity of your business and your own contribution.
In the financial plan, you set out your company's financial viability and what financial sources you need to achieve this. As mentioned before, you will have to prove that your company is viable during the first two years. You then provide this to the notary at the time of drafting your deed of incorporation.
The content of the financial plan is laid down by law. It must contain:
- all sources of financing
- a description of your activities
- the opening balance
- a projected balance sheet and income statement after 12 and 24 months
- a budget of expected income and expenditure for at least two years
- a description of the methods used to estimate expected turnover and profitability
Note: The notary will verify that all legal requirements are met, but will not carry out a substantive check.
Limit the risk of founder's liability in the event of bankruptcy and work with an accountant. You are, in any case, obliged to hire an accountant for your double-entry bookkeeping.
Audit by a company auditor
The contribution from the partners is not always purely financial: a partner can also contribute other things to the company, such as business premises or knowledge. If this is your case, then an independent auditor must verify that and report on it.
The costs of the audit and the auditor's report depend on the scope and level of difficulty.
Arrange for a business number and a VAT number
The government determines how much you pay for applying for your company number , which is done by registering in the Crossroads Bank for Enterprises (CBE). You do this via a Securex Business Counter and the cost is currently €105,50 (no VAT applicable) per business entity, for both a sole proprietorship and a company.
This registration must be done before your first - official - working day as a self-employed person.
The following documents are required for registration:
- identity card
- business bank account number
- any special permits you may need to carry out the relevant economic activity – the business counter can, in most cases, also arrange for this
- in the case of a bv, you must also bring a copy of your articles of association
The Securex Business Counter will activate your VAT number, which will cost you approximately €60 (excl. VAT).
Joining a social insurance fund and paying company contributions
As you are starting out as a self-employed person, you must join a social insurance fund such as that of Securex. As a shareholder of a company, you pay an annual company contribution, which, among other things, finances child allowances for the self-employed, or increases the minimum pension for the self-employed.
Setting up a bv: all costs
A number of costs have already been mentioned above:
- Having a financial plan drawn up by an accountant
- Notarial deed
- Publication in the Belgian Official Gazette
- Registration of the company number in the CBE
- VAT number activation
- Social security contributions as self-employed persons and company contributions
There are, however, a number of other things that you should bear in mind.
Accounting for a bv
For example, a BV is obliged to keep double-entry bookkeeping. What exactly does that mean?
In respect of every transaction, such as a purchase or sale, you are required to enter a counter-entry with supportive documents in the accounts. You therefore enter each transaction twice, hence the term 'double-entry bookkeeping'. You don't have to deal with that yourself, it's something your accountant handles.
You also prepare annual accounts on the basis of your double-entry bookkeeping. These consist of a balance sheet and a profit and loss account and provide insight into your company’s financial health.
If you do opt for a sole proprietorship instead of a bv, single-entry bookkeeping will suffice.
Start-up capital of a bv
The former private limited company had a minimum start-up capital of €18,550, part of which had to be paid up by the founder(s) upon incorporation. However, since the new legislation, this is no longer necessary. By means of a financial plan, you have to determine what financial resources are sufficient for your company to bridge the first two years. And then, all you have to do is provide that capital.
Exactly how much is 'sufficient' depends, of course, on your plans.
Director's liability
As a director of a company, you may be held liable for damages suffered by the company and third parties. This applies to errors committed in the performance of your duties. If you are in breach of your management duties, thereby causing damage, you can be held liable for it.
Therefore, a good directors' and officers' liability insurance is essential. How much you will have to pay for this depends on the risk you incur and the amount of cover you wish to take out.
Dissolution of a bv
There may be several reasons why you would wish to voluntarily dissolve your company. Please be aware, however, that it’s not that simple.
Just as setting up a BV is complicated, so is its dissolution. The procedure is cumbersome because many actors are involved.
You will also have to call on your notary again, which will entail costs. Would you like more information on this?
Ask your notary or one of our experts for advice.
Social security contributions
As a company representative, you pay social security contributions every quarter as a self-employed person and a company contribution once a year for your company.
Company contribution
You also pay your company contribution via a social insurance fund. The exact amount depends on your balance sheet total in the previous closed financial year:
- If below €825.750,09 the amount is €384.44
- If above €825.750,09 the amount is €960.26
(Almost) all companies must pay the company contribution, but there are exceptions.
