Substantial changes in the obligations for partnerships

The Company Law Reform, published on 27 April 2018, is making a number of changes in the Companies Code and the Code of Economic Law. These new regulations will enter into force on 1 November 2018. A few rules will also change for partnerships. Although some clarifications will still be published, we would already like to provide the following guidelines.

Changes in the Companies Code
A first terminological change will take place where “partnership” will no longer be called “société de droit commun” (civil law company) in French, but “société simple” (simple partnership). More importantly will be the elimination of the distinction between companies exercising a commercial activity and companies exercising a civil activity, which means that the distinction between commercial and civil partnerships will also fall away. As a result, partners of a partnership will remain jointly and severally liable to third parties for all of the partnership’s debts. 

Changes in the Code of Economic Law 
Where the civil partnership was not considered a “company” before, partnerships under the new law will henceforth be considered as “companies” as well. However, the qualification of “company” has a number of consequences which will soon be noticeable, in particular because of the new obligations that will apply to the (managers of) partnerships.

  • Registration in the Crossroads Bank for Enterprises (CBE)
    From 1 November 2018, new partnerships will have to register in the CBE through an Enterprise Counter before becoming operational. However, existing partnerships do not yet have to act immediately. They are required to register in the CBE by latest 30 April 2019 unless the King decides to bring this date forward…
  • Submitting to accounting obligations
    Partnerships will be required to keep accounts. Depending on their turnover, accounts can be kept on the basis of a simplified accounting scheme or a double-entry accounting system. If turnover is less than € 500,000, the simplified accounting scheme will be applied. If turnover exceeds this limit, the complete, double-entry accounting system is required. Based on our experience, we know that many partnerships already use a simple accounting system and prepare annual financial statements. Only small interventions could possibly suffice to meet the legal requirements.

The new obligation applies in principle from 1 November 2018, except in the case of already existing partnerships. Existing partnerships should fulfil this obligation from the first full financial year commencing after the expiry of a period of six months, from 1 November 2018. For partnerships whose financial year runs with the calendar year, the first “accounting obligation” commences in 2020 (subject to any other date by Royal Decree).

At present, it is still unclear whether partnerships are also required to publish their annual financial statements. Based on the Companies Code, the reference in Article III.90 of the Code of Economic Law is unclear on this matter. The Companies Code only requires legal persons to publish and not partnerships. In the meantime, we also assume that no obligation to publish will be required by the new law. 

Decision
It is clear that this new legislation will have an impact on the partnership’s operations. We will keep you abreast of further developments.

Valuation of usufruct
Now also a witch hunt when usufruct is sold?
In previous editions, we have already written about the valuation of usufruct when purchasing property, but recently there have also been regular reports of checks on the valuation of usufruct when reselling. However, up until now, the case law has followed the viewpoint of the taxpayer. Brief description For several years, there has been a lot of controversy regarding the valuation of usufruc
Vlabel is using conciliatory language
Has the decrease in Flemish sales duty led to an increase in the costs for purchases of usufruct?
The decrease in sales duty: also for split purchase usufruct-bare ownership The recent drop in the rate (to 7.00%) for purchases of family homes comes with a number of conditions. For example, the purchaser must be a natural person. Following some uncertainty, it was subsequently confirmed that, in the event of a split purchase of such a property by a company for the usufruct and the bare owner f
The labour market of the future
Earn (on the side) flexibly and untaxed
There are three legal social statuses in Belgium, (i) employee, (ii) self-employed and (iii) civil servant. However, the question is often asked whether these classifications are still relevant to the rapidly evolving labour market in which flexibility is key and many people opt for a 'freelance status' or wish to combine several statuses. Voka has already called for a debate on the labour mark
Is there a notification requirement for your organisation?
Well begun is half done: Prepare your organisation for the go-live of the UBO register.
The register of ultimate beneficiaries (the "UBO register") will go live on 31 October 2018. In one of our previous newsletters we presented an overview of the general framework of the UBO register. The Royal Decree of 30 July 2018, published in the Belgian Official Journal of 14 September 2018, explains this register in detail. We’ve reviewed what your organisation needs to take into account.&n
One of the action points of the ATAD Directive
Impact of the implementation of the Belgian CFC legislation: the de facto tightening of transfer pricing rules?
From 1 January 2019 (fiscal year 2020), the newly introduced CFC rule will come into effect in Belgium, due to the implementation of the ATAD directive1. This new legislation must be interpreted within the broader framework of the Summer Agreement and the reforms within Belgian corporate taxation, which, like the CFC legislation, have resulted in part from the heavily discussed implementation of t
Brexit, e-commerce & VAT action plan are discussed
Pending changes in the area of international VAT
In the previous edition we discussed the expected changes in terms of VAT at a national level. In this article we will briefly consider the VAT changes that are expected internationally.                Brexit  In principle, on 30 March 2019, the ‘Brexit’ will finally be a reality. The United Kingdom will no lon
Limited number of legal entity types
Help, soon my legal entity type will no longer exist!
The WVV ("CAC") is on its way On 4 June 2018, the "draft legislation introducing the Companies and Associations Code" was filed in the Chamber, marking one of the most far-reaching corporate law reforms since the introduction of the coordinated laws on commercial companies on 30 November 1935. This extensive reform of corporate law corresponds with the introduction of the “Companies and Asso
A brief summary
What should be expected in relation to (national) VAT?
Despite the fact that many of us are still in summer (holiday) mode, this article is going to focus on the VAT changes that we could expect in the not-too-distant future. It will provide a brief summary. For a more in-depth examination, you can always contact our VAT team.  Vouchers (1 January 2019)  In June 2016, Europe set out the VAT process for vouchers (Directive (EU)2016/1065 o
The FAQ contains no fewer than thirty-one questions
FAQ published regarding the Innovation Income Deduction (IID)
On 26 July 2018, the FPS Finance used Fisconet - you can registrate for free to consult the list of FAQ - to publish the long-awaited list of Frequently Asked Questions (FAQ) regarding the Innovation Income Deduction. Since the law of 9 February 2017, introducing the Innovation Income Deduction, there now follows the first additional comments concerning the legal provisions of Art. 20
Depends on the nature and frequency of the violation
Fine levels set for non-compliance with transfer pricing documentation obligation
From tax year 2017 and, more specifically, the implementation of the mandatory transfer pricing documentation obligation, there was an immediate indication that, from a second violation of non-compliance with the transfer pricing obligations, a fine of between 1,250 EUR and 25,000 EUR (Article 445, §3 Income Tax Code 1992) could be imposed. The scales of the administrative fines and their appl

Subscribe to our newsletter