TOC_Corporate accounting_2021

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CHAPTER I

Choosing a company 11

1 What is a company? 13

1.1 Definition 13

1.2 A company versus an association 14 2 Types of companies 16

2.1 The different forms of company 16

2.1.1 The partnership 16

2.1.2 The general partnership 16

2.1.3 The limited partnership 17

2.1.4 The cooperative company 17

2.1.5 The (private) limited liability company 17

2.1.6 The public limited liability company 17

2.1.7 The European Company 18

2.1.8 The European Cooperative Society 18

2.2. Legal personality 18

2.3 Liability of the partners in the various types of companies 19 2.4 Summary table of incorporated companies 20

3 Choice between sole proprietorship and incorporated company 21

3.1 Why choose a sole proprietorship or a company? 21

3.2 Factors influencing choice 22 3.3 Further analysis 23

3.4 THEME 1: A brief explanation of the tax legislation 24

3.4.1 Scope of corporate income tax 25 3.4.2 Basis of corporate income tax 26 3.4.3 The corporate income tax rate 27

3.4.4 Tax increase 28

3.4.5 Schematic 31

3.4.6 Recordings 33

3.4.7 Examples 35

3.5 THEME 2: Appropriation of results in companies 38

3.5.1 Result appropriation in the public limited liability company 38

3.5.2 Appropriation of results in the private limited liability company 53

3.6 THEME 3: The financial reporting obligations for companies 64

3.6.1 Introduction 64

3.6.2 Accounting and reporting obligations in companies 65

3.6.3 The inventory 66

3.6.4 The valuation rules laid down by the Royal Decree of 29 April 2019 implementing the Belgian Code of Companies and Associations (RD/BCCA) 68

3.6.5 The annual accounts 75

5 C ontents Contents Introduction 3

4 Exercises related to the chapter ‘Choosing a company’ 80

1 Tax cycle 80

2 Appropriation of results 82

3 Tax cycle and appropriation of results 83

CHAPTER II

The incorporation of a company 87

1 Legal provisions at the time of incorporation 89

1.1 General legal provisions 89

1.2 Legal provisions applicable to the NV and the BV 92

1.2.1 The public limited liability company (NV) 93

1.2.2 The private limited liability company (BV) 97

1.3 Summary of the conditions of incorporation of NV and BV 100

2 The formation of a company 102

2.1 Drawing up a draft of the articles of association 102

2.2 Drawing up a financial plan 102

2.2.1 Legal provisions 102

2.2.2 Purpose 103

2.2.3 Importance of the financial plan 103

2.2.4 Modalities and comments 103

2.2.5 The minimum components of a financial plan 103 2.2.6 Development of the financial plan 104

2.2.7 The responsibility of the accountant or the auditor 107

2.2.8 Conclusion 107

2.3 Appointment of an auditor 108

2.4 The deposit of the contributions in cash into a special blocked bank account of the company under formation 109

2.5 The company is incorporated and the financial plan is attached to the minute of the deed of incorporation 110

2.6 Registration in the Crossroads Bank of Enterprises (CDE) through the clerk’s office of the competent company court 110

2.7 Registration in the UBO register 110

2.8 Application for a VAT number 110

2.9 Publication of an extract of the deed of incorporation by the notary’s services 110

2.10 Other documents 111

2.11 Summary 111

3 The formation expenses 112

3.1 The costs of preparatory study 112

3.2 The costs associated with the execution of the deed 112

3.3 Registration costs 112

3.4 Publication costs 113

3.5 Note 113

4 The formation of a public limited liability company (NV) 114

4.1 Situation no. 1 – NV ISOLMAT 114

4.2 Documents 115

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4.3 The formation of a public limited liability company (NV): accounting treatment 133

4.3.1 Deposit into blocked bank account 133

4.3.2 Execution of the deed of incorporation 134

4.3.3 Contribution in kind – VAT invoice (5) 134

4.3.4 Unblocking of the blocked bank account 135

4.3.5 Formation expenses 135

4.4 Summary 136

4.4.1 Recordings relating to the deposit of the contributions and incorporation 136

4.4.2 Recordings relating to formation expenses 136

4.4.3 Recordings in respect of called-up capital 137

5 The formation of a private limited liability company (BV) 138

5.1 Situation no. 2 – BV COMPU 138

5.2 Documents 138

5.3 The formation of a private limited liability company (BV): accounting treatment 159

5.3.1 Recording the bank extract from the blocked bank account 159

5.3.2 The deed of incorporation 160

5.3.3 Unblocking of the bank account 160

5.4 Summary 160

5.4.1 Recordings relating to the deposit 160

5.4.2 Recordings relating to the incorporation 160

5.4.3 Recordings relating to the blocked bank account 161

5.4.4 Recordings relating to formation expenses 161

6 Special topics 162

6.1 Early payments 162

6.2 Non-payment of requested funds 167

6.3 The incorporation with different types of shares – Transfer of shares 170

6.3.1 Types of securities 170

6.3.2 Form of securities 175

6.3.3 Transfer and transmission of securities 177

6.4 Conversion from a BVBA to a private limited liability company (BV) 180

6.4.1 General implications of the new Belgian Code of Companies and Associations on existing companies 180

6.4.2 Specific implications of the new Belgian Code of Companies and Associations for existing BVBAs 181

7 Exercises related to the chapter ‘The incorporation of a company’ 184

CHAPTER III

Changes to the contributions 189

1 The increase of the contributions 191

1.1 Introduction 191

1.2 Legal provisions in case of a capital increase in a public limited liability company (NV) 192

1.2.1 The amendment of the articles of association 192

1.2.2 The authorised capital 193

1.2.3 The issue price 194

1.2.4 The contribution in cash 195

1.2.5 The contribution in kind 195

1.2.6 The paying up of the capital 195

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1.3 Legal provisions in case of an increase of the contributions in a private limited liability company (BV) 196

1.3.1 The amendment of the articles of association 196

1.3.2 The issuance by delegation 197

1.3.3 Private limited company 197

1.3.4 The issue price 197

1.3.5 The contribution in cash 198

1.3.6 The contribution in kind 198

1.3.7 The paying up of the contributions 198

1.4 Comparison of the legal provisions in the event of an increase in contributions 199

1.5 The public limited liability company (NV): the actual capital increase 199

1.6 The public limited liability company (NV): the actual capital increase with preferential subscription right 201

1.7 The public limited liability company (NV): the actual capital increase with agio or share premium 207

1.8 The public limited liability company (NV): the actual capital increase by incorporation of debts 208

1.9 The public limited liability company (NV): the actual capital increase by public subscription 209

1.10 The public limited liability company (NV): the formal capital increase 216

1.10.1 Capital increase through incorporation of reserves 216

1.10.2 Bonus shares 218

1.11 The private limited liability company (BV): the actual increase of the contributions 219

1.12 The private limited liability company (BV): the formal increase of the contributions 221

2 The decrease of the contributions 223

2.1 Introduction 223

2.2 Legal provisions 224

2.2.1 Legal provisions relating to the public limited liability company (NV) 224

2.2.2 Legal provisions relating to the private limited liability company (BV) 225

2.3 The public limited liability company (NV): the actual capital decrease by means of repayment to the shareholders 227

2.4 The public limited liability company (NV): the actual capital decrease by means of exemption of paying up (part of) uncalled capital 230

2.5 The public limited liability company (NV): the actual capital decrease through the acquisition of its own shares 231

2.6 The public limited liability company (NV): the formal capital decrease to cover losses incurred and/or to constitute a reserve to cover foreseeable losses 233

2.7 The private limited liability company (BV): the actual decrease of contributions through withdrawal/expulsion from the company’s assets 235

2.7.1 The withdrawal of a shareholder 235

2.7.2 The expulsion of a shareholder 239

2.7.3 Accounting treatment 240

2.8 The private limited liability company (BV): the formal decrease of the contributions to cover losses incurred 241

2.9 Tax issues related to the capital decrease and the decrease of the contributions 243

2.9.1 Tax issues in the event of an actual capital decrease or decrease of the contributions with repayment to the shareholders 243

2.9.2 Tax issues in the event of a formal capital decrease or decrease of the contributions without repayment to the shareholders 248

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3 The acquisition of own shares 249

3.1 Conditions for acquisition 249

3.2 Disposal of acquired shares 250

3.3 Accounting treatment 251

4 Exercises related to the chapter ‘Changes to the contributions’ 254

CHAPTER IV

Long-term debt financing

The bond loan 263

1 General concepts 265

1.1 Features of a bond 266

1.2 Difference between share and bond 267

1.3 Different types of bonds 268

2 The issue of a bond loan 270

2.1 Some legal decisions related to the issue of a bond loan 270

2.2 Some practical aspects of issuing bonds 270

2.2.1 The distinction between the different series of bonds 270

2.2.2 Emission costs 270

2.2.3 Issue price 271

2.3 Issue of a private bond 271

2.4 Issue of a bond by public subscription 275

2.5 Issues below or above par, redemption above par 276

2.6 Schematic: issue of a bond loan 279

3 The interest payment on a bond loan 280

3.1 Recording of the ordinary interest on a bond loan 280

3.2 The allocation of coupons and the end of the financial year do not coincide 281 3.3 Entries related to the prescription of coupons 282

3.4 Schematic: interest payment bond loan 283

4 The redemption of a bond loan 284

4.1 The redemption at par of a bond loan, in one instalment, at the end of the term 284

4.2 Redemption above par 285

4.3 Annual redemption of a bond loan 286

4.4 Redemption by drawing of lots 286

4.4.1 Drawing up a redemption plan 287

4.4.2 Entries related to the redemption by drawing of lots 291 4.5 Redemption by repurchase of bonds 294

4.6 Conversion of bonds into shares 297

4.7 Schematic: redemption of a bond loan 298

5 Exercises related to the chapter ‘Long term debt financing – The bond loan’ 299

9 C ontents

CHAPTER V

The liquidation of a company 303

1 The dissolution 305

1.1 Causes of dissolution 305

1.1.1 Voluntary dissolution 305

1.1.2 Dissolution by operation of law 306

1.1.3 Judicial dissolution 306

1.2 The alarm bell procedure in the NV and BV 307

2 The liquidation 308

2.1 Legal personality of the company in liquidation 308

2.2 Liquidation by one or more liquidators 308

2.3 Liquidation operations 309

2.4 Practical procedure 310

2.5 Taxes in the event of liquidation 311

2.6 Publication obligations 311

3 Examples 312

3.1 Liquidation whereby all creditors are satisfied 312

3.2 Liquidation whereby not all creditors are satisfied 324

4 Dissolution and liquidation in a single act 326

4.1 Legal terms and conditions 326

4.2 Practical working method 326

5 Exercises related to the chapter ‘The liquidation of a company’ 328

CHAPTER VI

Integration exercises 333 Bibliography 340 1 Books 340 2 Legislation 340 3 Websites 341

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