The Treasury of the FPS Finance recently announced that it is going to delete no fewer than 29,000 companies from the Crossroads Bank for Enterprises (“CBE”) (in two phases). These deletions will be visible to all government departments and citizens who consult the CBE and will also be announced in the Belgian Official Gazette. Could this apply to your company and what are the possible consequences? We explain the situation in this article.
Extension of automatic deletion in the Crossroads Bank for Enterprises
The Act of 5 November 2023 (“containing various provisions concerning the Economy”) amended Article III.42 of the Belgian Code of Economic Law (“WER”) with effect from 21 December 2023. This article covers the specific grounds on which the management department of the CBE may proceed with the automatic deletion of a company in the CBE.
Two procedures already existed for automatic deletion.
- The first concerns a standard procedure for deletion in the event of erroneous or missing data in a registration which has not been corrected by the entity concerned following a request from the management department (Article III.40 WER).
- The second procedure already contained five specific grounds for automatic deletion in order to be able to remove so-called “dormant companies” (in Art III.42 WER).
Two new specific grounds for automatic deletion have now been added to this article, including non-compliance with the UBO obligations.
Non-compliance with formalities UBO register
The new law allows the CBE management department to automatically delete a company if it does not (any longer) comply with the UBO obligations in one of the following three ways:
• An administrative fine has been imposed for improper compliance with Article 1:35 of the Companies and Associations Code (“CAC”) with regard to obtaining “sufficient, accurate and up-to-date information from the ultimate beneficiaries and recording it in the UBO register” and the company concerned has not yet corrected or passed on the data after 60 calendar days;
• The company does not comply with the obligation of Article 1:35 CAC as quoted above and, moreover, has not undertaken any publication in the annexes to the Belgian Official Gazette or in the Belgian Official Gazette for seven years.
• The company has not complied with the obligation to annually confirm its data in the UBO register for more than one year.
Consequences of automatic deletion
Because the deletion is an administrative measure, it has no impact on the legal personality of the company.
However, other consequences of the deletion are considerable, such as:
- A ban on continuing to carry out economic activities, with criminal sanctions as a (possible) consequence;
- Third parties are informed of the situation through publication in the Belgian Official Gazette. Moreover, the deletion itself is also visible in the CBE (and may therefore have major commercial consequences). Compliance with UBO obligations is particularly important in your banking relationships. Banks may postpone certain transactions or even decide to terminate the relationship with your company;
- All legal actions brought by the company become inadmissible.
Solution
You can have the completion of the UBO formalities carried out by your trusted advisor. In addition, you can simplify the annual confirmation and update of the UBO register in the event of changes by linking your UBO register to the Belgian Official Gazette, and/ or to the electronic eStox share register. After all, the link with the Belgian Official Gazette ensures that the information already available there does not have to be added to the UBO register twice. When the link is made with eStox and automatic processing is on, all changes of shareholders with a UBO obligation are immediately registered in the UBO register.
Once the UBO register is fully in order, the deletion is automatically removed according to the FPS Finance. The FPS Finance indicated that this currently takes up to 10 days.
Our PKF BOFIDI Legal experts are happy to help you
Do you have any questions about deletion from the CBE? Then you can always contact our legal experts.
This article was written by Irene Tromp, specialized in corporate and business law.