Since May 1, 2019, the new Companies and Associations Code (CSA) has come into effect.
Existing companies have until January 1, 2024, to adjust their articles of association.
We can certainly assist you with this modification and ensure the necessary changes are made before the deadline imposed by the legislator.
Note that since January 1, 2020, even if your company’s articles have not yet been updated, new mandatory provisions now apply to all companies/associations.
We invite you to find below the non-exhaustive list of these provisions:
- Adjustment of the company’s legal form on all official documents, as sometimes mentioned on your website, letterhead, invoices, etc.:
a) SPRL becomes SRL (Private Limited Company)
b) SCRL becomes SC (Cooperative Company)
c) SCS becomes SComm (Limited Partnership)
d) S.N.C. becomes SNC (General Partnership)It is therefore essential to adjust your official documents accordingly.
The term “manager,” used to refer to the person responsible for the SPRL, is removed and replaced by “director.” In the legal and official documents of your company, you will now need to sign as “director” instead of “manager.”
Profit distribution can now only take place after a double test, namely a “net assets test” and a “liquidity test.” Simply put, the net assets test means that the equity in the balance sheet cannot be negative. The liquidity test indicates that the company must still be able to pay its debts at least for the next twelve months.
If you decide to move your company’s registered office, you should also take this opportunity to adjust the articles and bring them into compliance with the new Companies and Associations Code, requiring a notary to carry out this procedure.
The CSA also introduces changes for directors, including:
- Improved protection for directors
- Elimination of the minimum capital requirement for SRLs. However, the obligation to prepare a financial plan remains unchanged and is even more important to demonstrate the viability of the company based on the contribution made during its incorporation.
- At least one founder required for the establishment of an SRL
Feel free to contact us for further information.
