Following the implementation of the European accounting directive of 26 June 2013 on the annual financial statements into Belgian national law, a new definition of “small company” has been laid down in the Belgian Companies Code as of 1 January 2016. In addition, the concept of a “micro company” has been introduced and the “small group” is redefined into a “group of limited size”.
New definition of small company
Art. 15 of the Belgian Companies Code sets out the thresholds for qualifying as “small”. These thresholds have been increased as per 1 January 2016. A company qualifies as a small company if it does not exceed more than one of the following thresholds on the balance sheet date of the two most recent financial years:
· annual average workforce: 50;
· turnover (excluding VAT): EUR 9,000,000; and
· balance-sheet total: EUR 4,500,000.
The purpose of applying the aforementioned criteria to two financial years is to build in a delay, to ensure that a company will not gain or lose its status of “small” from one year to another due to the occurrence of exceptional circumstances during a specific year.
Introduction of micro-company
The Belgian legislator also introduced a new subcategory of small companies, i.e. the “micro-company”. The micro-company is a company that is not a parent company or a subsidiary and that does not exceed more than one of the following thresholds on the balance sheet date of the two most recent financial years:
· annual average workforce: 10;
· turnover (excluding VAT): EUR 700,000; and
· balance-sheet total: EUR 350,000.
Qualification as a micro-company will lead to reduction of administrative burden (e.g. a micro-company is allowed to draw up its annual accounts on the basis of a ‘micro-scheme’, still to be implemented by royal decree).
New definition of small group
The small group is redefined into a “group of limited size” and the thresholds are raised. A company and its subsidiaries, or a consortium, are to be considered as a group of limited size in the event not more than one of the following thresholds, on a consolidated basis, are exceeded on the balance sheet date of the two most recent financial years:
· annual average workforce: 250;
· turnover (excluding VAT): EUR 34,000,000; and
· balance-sheet total: EUR 17,000,000.
Small companies are allowed to establish their annual accounts in accordance with a simplified scheme. However, small companies that have a works council must draw up their annual accounts in extended form because of their reporting duties to the works council.
Moreover, small companies do not have to issue an annual report for the annual shareholders’ meeting and the annual accounts must not be revised by an external auditor. In the event however, companies belong to a group which is obliged to draw up consolidated annual accounts, the annual accounts of such company will in any event be subject to revision by an external auditor.
For specific questions, you can reach out to the authors of this article or to your regular contact person at Cresco.
Glenn L’hoëst | associate
Tessa Gijbels |partner