New Belgian Company Code Series - Issue 18Distribution of Profits by a Public Limited Company (SA/NV)
The Company Code sets limits on certain distributions of profits by a public limited-liability company (société anonyme/naamloze vennootschap) (SA/NV), with a view to protecting the company's creditors. The new Code of Companies and Associations (CCA) relaxes these rules, in keeping with the overall objective of making Belgian company law more flexible.
Under the Company Code, the distribution of profits by an SA/NV was limited mainly by the following two rules:
- The rule that no distribution may be made if, on the closing date of the last financial year, the company's net asset value, as appears from its financial statements, was below or, as a result of the distribution, would fall below the higher of the paid-up capital or called-up capital plus any reserves which may not be distributed by law or pursuant to the company's articles of association.
- The rule that imposes restrictions on the distribution of interim dividends, i.e. the possibility to distribute profits from the current financial year.
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