Public limited company (NV)

What is a public limited company (NV)?

The public limited company (NV) is often used for larger companies, although nothing prevents SMEs from choosing it too. One person is enough to set up the company, although that is rather the exception precisely because of the ease of transferring shares after incorporation, hence the observation that usually several to many shareholders take part. The deed of incorporation with the articles of association is executed by a notary.

What are the characteristics of an NV?

The NV is ideally suited to companies that will need a lot of capital to operate and that count on (later) having many shareholders. After all, the NV may raise outside capital by issuing new shares and, subject to a number of strict conditions, may even appeal to savers. The NV has legal personality, so the assets of the company and of the individual shareholders are completely separate. The business risk of the shareholders is limited to their contribution. Note that when shares are sold, the amount does not go to the company but to the person transferring the shares. The buyer's risk is therefore the sum he or she paid, should the company lose value or go bankrupt. Small companies tend to opt for the private limited company, among other reasons because no minimum capital is required, and like the NV, the BV can be listed on the stock exchange.

Financial obligations

To set up an NV, the law requires a starting capital of € 61.500,- that must be fully paid up: a considerable threshold. As with other company forms, a solid financial plan is required here too, with substantiated projections of results and cash flows over 12 and 24 months. What must be included in such a financial plan is laid down by law, just as for the private limited company. Drawing up a financial plan requires financial and technical knowledge, so the founders usually engage a financially savvy adviser, for example an accountant. But be careful: given the need for sound assumptions and arguments as the basis of the financial plan, knowledge of the business activity is just as necessary. So it's important to seek advice on that too, because accountants do not by definition have the required business experience. Should problems arise and, for example, a bankruptcy follow within two years of incorporation, the quality of the financial plan will determine whether or not a judge lets the founders keep the protection of their own assets.

Under the new law, the NV can operate with one director, which was not possible before. Directors' liability applies here too. Directors have management duties they must perform properly. If they don't, the director can be held liable with his or her personal assets. A distinction is made between internal and external liability. Internal refers to the BV itself holding the director(s) accountable for mistakes; external applies to claims by bodies or persons outside the company. Directors' liability insurance is therefore no unnecessary luxury.

Administrative obligations

Among other things, an NV must keep double-entry bookkeeping . Some entrepreneurs have the training and technical knowledge to do this themselves, but in practice this rarely happens at NVs, mainly because of the size of the company and therefore of the administration. The aim of an NV is business success, so the administration and organisation are put on a professional footing with an external bookkeeper or accountant, but usually even with in-house staff for those tasks. Depending on their size, public limited companies are also obliged to appoint a statutory auditor and even set up an audit committee. In addition, there are regulations for those who want to work with a so-called dual board structure, namely a supervisory board and a management board. Quite a few rules and regulations that complicate matters.