• Owned by a small number of shareholders.
• Private sale of shares.
• Limited liability for shareholders.

A Private Limited Company is owned by a relatively small number of shareholders, and the sale of company shares is handled privately. An individual/owner is only responsible for the business’s financial liabilities to the extent that they invested in the company.

Limited liability for shareholders; suitable for smaller enterprises with restricted ownership.

• Open to public ownership.
• Shares available to the public.
• Financial liability limited to capital investment.

A public company is a corporation whose ownership is open to the public. Anyone can buy shares in the company’s stocks. A limited company is a corporation in which an individual’s financial liability for the company is restricted to the capital investment.

Ideal for larger businesses seeking to raise capital through public investments; limited liability for shareholders.

• Shared responsibilities.
• Unlimited liability.
• Jointly owned business by two or more individuals.

A general partnership is a business arrangement whereby two or more individuals agree to share responsibilities, assets, profits, financial and legal liabilities of a jointly owned business; granting unlimited liability.

High personal risk but shared management and profits; suitable for businesses with strong trust between partners.

• Combination of limited and unlimited liability.
• Some partners not involved in management.
• Investment provided by limited partners.

In a limited partnership some partners are not entitled to manage its affairs but provide all or part of the partnership’s capital. These partners are limited in their liability. In addition, one or more other partners are nominated as managing or general partners and have unlimited liability for the partnership’s debt and losses.

Combines investment opportunities with risk management; allows for passive investors.

• Includes general and limited liability partners.
• Incorporates share capital.
• Blends features of partnerships and limited companies.

Includes partners with general liability and the limited liability partners. Unlike the limited partnership, this type has a share capital.

Offers flexibility with investment and liability distribution; suitable for businesses seeking diverse capital sources.

• Unincorporated business with one owner.
• Personal liability for all business debts.
• Simple and easy to establish.

Often referred to as a sole trader, a sole proprietorship is an unincorporated business with just one owner who pays personal income tax on profits earned, hence any debts or losses incurred cannot be shared with other individuals. It is the cheapest and easiest business structure to establish with the individual legally responsible for all aspects of the business.

Simple to establish but high personal financial risk; suitable for small, low-risk businesses or startups.

• Available at the Crossroads Bank for Enterprises (CBE).
• Accessible through Public Search section.
• National Bank provides additional filing history.

Corporate information is available at the Crossroads Bank for Enterprises (CBE) using the Public Search section: CBE Public Search.

Through company name or registration number, it is possible to obtain company information or company filing history via the National Bank: https://cri.nbb.be.

Utilize both CBE and National Bank resources for a comprehensive view of a company's official status and history. Cross-reference information from both sources for due diligence.

• Financial state information from CBE and private agencies.
• Historical financial accounts from the National Bank.
• Private agencies offer detailed credit reports.

You can obtain information on the financial state of affairs for companies and industry at Crossroads Bank for Enterprises. There are also numerous private reporting agencies offering credit checks. As mentioned within the previous section, historical financial accounts may be obtained from the National Bank: https://cri.nbb.be.

Combine official sources with private agency reports for a holistic view of a company's financial health. Consider subscribing to a credit monitoring service for ongoing updates on key business partners.

• Judgment information typically found in credit reports.
• Some legal databases may provide additional information.

Normally you find this information in a credit report. Credit reports are offered as a service online.

Regularly check credit reports for judgment information. For high-stakes business relationships, consider engaging local legal experts for more thorough searches. Be aware that not all judgments may be easily accessible online in Belgium.

• Copies of invoices.
• Terms and conditions.
• Signed power of attorney.

A claimant is free to choose which evidence it wishes to submit in support of the claim, but as a minimum, it is advisable to have at least the following available:

• Copies of the invoices
• A copy of the terms and conditions
• A signed power of attorney

In Belgium, a power of attorney is needed for each file and must be signed by the creditor’s legal representative. The proxy must be drafted in the language of the legal proceedings (e.g. in French, Dutch or German).

Maintain comprehensive documentation for all business transactions. Ensure power of attorney is properly prepared in the correct language.

• Formal notices.
• Contracts.
• Proof of delivery.
• Notes of conversations.

In disputed cases, it is highly recommended to present copies of the formal notices and/or reminders sent to the debtor, proof of orders or contracts, proof of the delivery of the goods and any other document signed by the debtor in which the debtor acknowledges the claim or the dispute. The creditor should also be able to provide any notes of conversations between the creditor and the debtor.

Keep detailed records of all communications and transactions. Document acknowledgments of claims or disputes. Maintain a log of all conversations related to the contract or dispute.

• Seller retains ownership of goods until contractually defined conditions are met.

Retention of title when included in trade contracts, allows the seller to retain ownership over the goods supplied until certain contractually defined conditions are met, therefore providing the seller with a form of security against the buyer's default or insolvency. Since 2018, the clause of retention of title has been recognised by Belgian law as a general principle and is laid down in sections 69 to 72 of chapter 2 of Title XVII of the third Book of the Belgian Civil Code.

Ensure retention of title clauses are included and understood.

• A warning notice to the debtor is mandatory before filing claims.

A warning notice to the debtor is mandatory before filing any enforcement claims. The warning notice should include:

• Creditor name and overview of the claim.
• The total amount of the claim, including penalties (interest).
• Payment method required.
• A warning that the claim will be enforced through the enforcement authority in case the claim is not settled by the required date.
• Information on how to dispute the claim.

If this measure has been taken and the payment still has not been made after the two-week notice period (according to the law), the creditor may file for enforcement.

Send a comprehensive warning notice before taking legal action. Ensure all required elements are included to avoid potential delays in the enforcement process.

• Applicable if specified in the contract or by statutory default.

If not agreed in the contract, then statutory interest and collection costs are applicable. The penalty interest of the claim is 8%.

Clearly specify interest rates and collection costs in contracts to avoid defaulting to statutory rates. Consider the impact of the 8% penalty interest rate when assessing late payments.

• Different limitation periods apply depending on the claim type.

General limitation periods include:

• 30 years (ten years in some cases) for claims regarding the recovery or protection of real property.
• Five years for tort claims, from the day after when the claimant is aware of the damage or aggravation of the damage, and of the identity of the person liable for the damage, subject to a long-stop period of 20 years and one day after the date on which the fact, action or negligence that caused the damage occurred.
• One year for claims against consumers relating to commercial goods, but five years for claims regarding essential goods such as gas, electricity and water.
• Ten years for most other claims, such as contractual claims.

A writ of summons suspends the limitation period until a final decision has been rendered. A formal notice may extend the limitation period for a maximum of one year if certain formal requirements are met.

Understand and adhere to limitation periods to preserve your claims. Consider using formal notices to extend limitation periods when necessary. Be aware of the different periods for various types of claims.

• Litigation, arbitration, and mediation are available forms of dispute resolution.

In Belgium, large commercial disputes are resolved through litigation or arbitration. Mediation is used to a lesser extent. Litigation proceedings are adversarial and are governed by the Belgian Judicial Code. Most domestic commercial arbitrations are initiated with the Belgian Centre for Arbitration and Mediation (CEPANI). Important international commercial arbitrations are initiated under the International Chamber of Commerce Arbitration Rules.

Consider alternative dispute resolution methods before litigation. Be aware of the specific rules and institutions governing different types of ADR in Belgium. Include pre-action conduct requirements in contracts to potentially avoid costly litigation.

• Initiated by serving a writ of summons; legal representation is not always required.

Proceedings are initiated by serving a writ of summons (dagvaarding/citation) on the debtor. The writ comprises various sections, including the statement of facts, legal argument(s) and claim(s). The writ is served by a bailiff (gerechtsdeurwaarder/huissier de justice) on the debtor at its headquarters, residence, or elected domicile. If the debtor is not present, the document can be served on a third party or left at the debtor’s address. A defendant cannot contest service by a bailiff or question the date of receipt. Serving a writ of summons in Belgium from another EU member state can also be effected directly by registered letter with acknowledgement of receipt, or equivalent (Article 14, Regulation (EC) 1393/2007 on the service in the member states of judicial and extrajudicial documents in civil or commercial matters).

Ensure the writ of summons is comprehensive and accurately represents your case. Consider seeking legal advice for complex cases, even if representation is not mandatory.

• Average time to get a judgment is four months; can extend to years if disputed.
• Costs for summons and court registration approximately EUR 300 – EUR 400.
• Indemnity for procedure is granted by the court and charged to the debtor unless otherwise decided.
• Legal representation costs vary; not charged back to debtor.

The average time frame of getting a judgment (enforcement not included) is four months. If there is a dispute and/or appeal, it can take from one to several years to obtain a judgment.

The summons and registration on the docket of the court is approximately EUR 300 – EUR 400.

The indemnity for procedure is granted by the court to the party obtaining the claim. The court determines the exact sum. This indemnity is charged back to the debtor unless the court decides otherwise.

Legal representation costs and fees are established subject to the case, as well as the tasks performed by the lawyer. These costs are not charged back to the debtor. If a party uses a document that is not in the language of the legal proceedings, the other party and/or court can ask for the translation of the document; a cost which is not charged to the debtor.

There may also be additional costs for witnesses, experts, etc.

Be prepared for potentially lengthy litigation, particularly if there are disputes. Budget for both court fees and legal representation, understanding that not all costs are recoverable from the debtor.

• Bailiff must notify the judgment and handle enforcement.
• Enforcement starts after judgment is final or debtor fails to pay.

The bailiff must notify the judgment and handle the enforcement phase which starts once the judgment is final (i.e. if there is no legal remediation within 30 days from date of notification of the judgment to the debtor) or the debtor does not pay after having received a final order to pay from the bailiff with a final deadline.

Ensure proper notification of judgments for enforcement. Be prepared for potentially lengthy processes.

• Three main options available to bailiffs.
• Timeframes vary based on method.

Bailiffs have three options to enforce an enforceable title: enforcement in movable property, enforcement in immovable property (real estate), or seizures in the hands of third parties if possible. Ordinary enforcement procedures (based on movable property) take around 12 months. The time frame of enforcement in real estate depends very much on the single course of the case, the court, and possible buyers.

Consider the most appropriate enforcement method based on the debtor's assets. Be prepared for longer timeframes with real estate enforcement.

• Simplified procedure under EU regulation 1215/2012.
• Specific requirements for creditors.

A foreign judgment of an EU member state must be enforced in Belgium. The proceedings are substantially simplified by the EU regulation 1215/2012, which abolished the old system based on the EU regulation 44/2001. This new system has been in place since 10th January 2015. Before applying for enforceability in Belgium, the creditor must notify the judgment to the debtor by bailiff to make it final (meaning an appeal is no longer possible). Once the judgement is final, the creditor must provide the Belgian enforcement authority with a copy of the judgment that satisfies the conditions to establish its authenticity, a certificate certifying that the judgment is enforceable and containing an extract of the judgment, as well as, where appropriate, relevant information on the recoverable costs of the proceedings and the calculation of interest.

Familiarize yourself with Regulation 1215/2012 for EU judgments. Ensure all required documents are prepared.

• Requires special exequatur procedure.
• Lengthy and costly process.

A foreign judgment of a non-EU member state must be enforced in Belgium. Before applying for enforceability in Belgium, the creditor must notify the foreign judgment to the debtor by bailiff to make it final (meaning an appeal is no longer possible). Once the judgment is final and enforceable, the creditor must initiate a special exequatur procedure before the competent Belgian court to obtain permission to enforce this foreign judgment in Belgium which should then be sent to the debtor. If there is no appeal, the permission for enforceability is final and the foreign judgment can be enforced in Belgium. This is a long and costly process and includes the translation of the judgment and other documents; costs for which are not chargeable to the debtor.

For non-EU judgments, consider the time and cost implications of the exequatur procedure. Budget for translation expenses.

• Three main types in Belgium: Bankruptcy, Liquidation, and Temporary Composition.

In Belgium, there are three main types of insolvency:

• Bankruptcy
• Liquidation
• Temporary composition (statute on the continuity of companies)

Bankruptcy and liquidation can take several years, depending on the complexity of the debtor's company and situation. For any statutory reorganisation with a collective agreement, debtors suggest the bare legal minimum which is still hard to recover due to the lack of financial stability which usually results in the debtor entering bankruptcy.

Understand the different insolvency options in Belgium. Be prepared for potentially lengthy processes in bankruptcy and liquidation cases.

Involves asset liquidation

Low recovery for unsecured creditors.

• Can be requested by:
  • The debtor
  • The public prosecutor
  • A creditor (under specific conditions)

• Requires prior judgment in payment against debtor.
• Unsuccessful enforcement of judgment.
• Presence of factual elements meeting bankruptcy conditions.

• Deadline: Usually one month after bankruptcy declaration.
• From 1st April 2017: Electronic submission required.
• Fee payment necessary.

Managed by a liquidator.

As a rule of thumb, it is very rare to obtain a dividend for unsecured debts.

The liquidator is appointed by the commercial court. The claims must be lodged to the liquidator within the delay period noted by the court, which varies from case to case. There are two types of declarations: unsecured creditors and secured creditors. As soon as the liquidator has clarified the debtor's assets versus debts, the liquidator will be able to confirm to the creditors if dividends can be expected or not.

• Also known as judicial reorganisation.
• Based on statute of 31st January 2009 on the continuity of companies.
• Replaces former judicial composition.
• Retention of title cannot be referred to by creditors in this procedure.

• Consider judicial reorganisation as an option before bankruptcy.
• Understand the procedures and requirements for each type.
• Monitor compliance with the reorganisation plan closely.

1. Amicable agreement (section 43)
2. Collective agreement (sections 44 to 58) - most common
3. Transfer under the court's authority (sections 59 to 70)

• Debtor must submit a request to the court.
• If opened, moratorium usually lasts three months.
• Possible extension from six to 12 additional months (section 38) in specific cases.

• Debtor proposes reorganisation plan with payment plan to all creditors.
• Plan requirements:
  • Approval by majority of creditors (at least half of all sums due in principal amount).
  • Minimum 15% reimbursement of principal amount to each creditor.
  • Maximum timeframe of 5 years.
• Court's role:
  • Cannot change plan content.
  • Verifies formal conditions are met.
  • Validates or rejects the plan.
• If validated, plan is enforceable against all creditors.
• Creditors can initiate cancellation if debtor doesn't follow the plan or is proven unable to respect it.