Criminal provisions in the Belgian Companies and Associations Code

The Belgian Companies and Associations Code (CAC) contains far-reaching criminal provisions that have a direct impact on corporate housekeeping. Directors (including de facto directors) and legal representatives of Belgian branch offices face significant personal risk if they fail to comply with their administrative and legal obligations.

UBO Register

Article 1:35 CAC requires companies to maintain adequate, accurate and up-to-date information on their ultimate beneficial owners (UBOs), including at least their name, date of birth, nationality, address, and the nature and extent of their economic interest.

Members of the governing body who fail to comply with these formalities may be fined between EUR 50 and EUR 5,000. The governing body of each company (typically the sole director or board of directors) must verify the existing registration at least once a year. In practice, however, the obligation is that any changes must be recorded in the UBO register within one month.

The UBO administration is actively reviewing registrations, and many companies have already received instructions to update or complete their filings. In certain cases, administrative fines have been imposed.

Annual accounts

Directors who fail to submit the annual accounts to the general meeting for approval within six months of the end of the financial year risk a fine of between EUR 50 and EUR 10,000 (art. 3:43, § 1, 1° CAC).

Members of the governing body who knowingly breach accounting regulations also face fines of between EUR 50 and EUR 10,000 and, in cases of fraudulent intent, an optional prison sentence of between one month and one year.Companies are civilly liable for the payment of fines imposed on their directors (art. 3:43, § 2 CAC) and may subsequently seek recovery from the natural person concerned.

Belgian branch offices - disclosure obligations

Foreign companies establishing a branch office in Belgium must comply with filing obligations set out in article 2:24 CAC. This includes depositing certain corporate documents prior to the opening of the branch and keeping this information and documents up to date when changes occur.

Failure to comply with these disclosure requirements is punishable by a fine of between EUR 50 to EUR 10,000 under article 3:45 CAC. The same penalties apply for failure to prepare or file the annual report as required by articles 3:5 and 3:6 CAC.

Dividend distribution

Directors who breach the rules governing dividend or other distributions are liable to a fine of between EUR 50 and EUR 10,000 and, in certain cases, an optional prison sentence of between one month and one year. This highlights the importance of correctly performing and documenting the required liquidity and solvency tests prior to any distribution.

Our practical recommendations

A clear and well-maintained corporate housekeeping calendar is essential. Companies should ensure the timely organisation of the general meeting (on the date set out in the articles of association and in any event within 6 months of year-end), the filing of the annual accounts (within 30 days of approval), and regular verification and updating of the UBO register.

All corporate decisions should be properly documented, and professional advice should be sought in a timely manner where needed.

Corporate housekeeping is not optional. With fines of up to EUR 10,000, directors (including de facto directors) and legal representatives bear real personal responsibility. A professional approach and robust internal procedures are essential to avoid or mitigate these risks.

(Sidenote: this newsflash does not aim to provide an exhaustive overview of all criminal provisions of the CAC. Cases involving fraudulent intent may give rise to additional and more severe penalties.)