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Changing the form of your company

Is your business growing, your situation changing, or do you want better protection for your assets? Now is the time to change the form of your company. Here's an overview of the most common situations and the steps you'll need to take.

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When is it worth making a change?

There are two main reasons for changing your company form: tax optimisation or legal protection.

Tax optimisation

As a sole proprietorship, you are subject to progressive personal income tax: the higher your income, the higher the tax rate (up to 50%). Do you earn more than €34,000 net per year? If so, a company is more advantageous from a tax point of view: you'll benefit from a reduced rate of 20% on the first 100,000 euros of your company's profits, then a fixed rate of 25%.

Legal protection

As a sole proprietorship, you are liable for your company's debts out of all of your personal assets. This means that creditors can also seize your home, your savings, your car... In the case of a limited liability company or a public limited company, only the company's assets are at stake.

Good to know

Are you wondering whether a change is really right for you? Ask a chartered accountant, notary or business consultant before making your decision.

From a sole proprietorship to a company

The most common switch is from a sole proprietorship to a company. Your existing membership of a social insurance fund as a self-employed individual will continue, but your company must also join one too. You also pay the annual contribution that is charged to companies.

  1. Choose the legal form of your company — limited liability company (SRL), public limited company (SA), general partnership (SNC), cooperative company (SC) or limited partnership (SComm). Each form has different consequences for your liability, administration and expenses. Discuss the options with your chartered accountant. Compare all company forms
  2. Prepare to set up your company — have the articles of association drawn up, develop a financial plan, etc. 
  3. Deregister your sole proprietorship and register your company — these steps can be taken at an accredited business counter. Your new company will receive a new business number.
  4. Adjust your social security contributions — contact your social insurance fund to have your contributions recalculated based on your projected income.
Steps to take at a business counter

 

From one type of company to another

Would you like to convert a general partnership into a limited liability company, or transform your limited liability company into a public limited company? This can be done, but you'll need to do some work to prepare. Ask your chartered accountant for help, as the procedure can vary depending on the form of your current company and the one you wish to adopt.

  1. Choose the form of your company: limited liability (SRL) or unlimited liability (SNC)? Give reasons for your choice in a report, and write up a recent balance sheet too.
  2. Have the change approved: the general meeting must approve the new company form and amend the articles of association.
  3. Make the change public: publish the new articles of association in the annexes to the Belgian Official Gazette — a task for your notary — and also inform the Federal Public Service (FPS) Finance, the National Social Security Office (NSSO), your tax office and your bank.

Good to know

Your company number remains the same if the legal form of your company changes. The CBE is automatically updated when the amended articles of association are filed.