Types of Enterprise

You can do business with or without a company. Your choice will have important consequences. Therefore, become informed well in advance. Do you have any further questions? Do not hesitate to contact a notary’s office.


Here you find more information about companies:

  • What is a company?
  • Reasons to incorporate a company
  • Closing a business
  • Company forms
  • Securities register

Associations or Foundations

Here you find more information about associations or foundations:

  • Not-for-profit association
  • International not-for-profit association
  • Private foundations
  • Public utility foundations

One-man businesses

Here you find more information about one-man businesses

  • The incorporation procedure
  • Declaration of the family home not being subject to attachment

Branch offices

Here you find more information about branch offices

  • The registration procedure

Reasons to incorporate a company

The company incorporated by you has legal personality. This is not the case for a one-man business and a partnership. Legal personality means that the business has its own existence, independently of the founders, shareholders and directors. The company continues to exist, even if the directors and/or shareholders die. On the other hand, a company may be dissolved during the life of the directors and/or shareholders. A company with legal personality has its own name, its own rights and its own obligations.

As opposed to a ‘natural’ person, the company does not acquire its legal personality automatically. Firstly, a company must be incorporated through a deed of incorporation. The articles of association are, then, filed at the registry of the commercial court. Finally, the deed of incorporation is published in the Belgian Official Gazette. In this manner, the incorporation of the company is a fact verifiable by other persons.

A company constitutes the legal basis to organize the cooperation between different persons. It is a cooperation by which each party makes its own contribution in order to subsequently generate  profits together and to share such profits among them.

The contract, under the form of the articles of association, determines the framework of rules in place  among the various parties. It creates the legal framework within which the cooperation shall take place, so that the basis for a solution is offered to possible problems and contestations.

Doing business entails risks for your private assets. Entrepreneurs attempt to limit as much as possible their liability and to minimize or even exclude, at the same time, the risks of claims by  creditors against  their personal property.

You can prevent your full property from constituting security backing your trade payables by opting for the appropriate company type with limited liability, as a result of which you and other partners can, in principle, only lose what you have contributed to the company.

In many cases, the death of the entrepreneur causes the cessation of his/her business. In case of death, the business is indivisibly transferred to the hands of all of his/her heirs. All heirs are, then co-owners of the business, so to speak.

Our legal framework provides, however, that each heir can claim, at any time, his/her share in the estate and request distribution. In case of death of the entrepreneur, a one-man business is, therefore, rather vulnerable. The heirs of an entrepreneur who had operated a one-man business can claim the distribution and/or sale of the business.

By organizing your business as a company, this problem can be partially overcome. In this manner, the undivided interest, caused by the entrepreneur’s death, does not refer to the business itself, but rather to the shares which the deceased person had held in the business. Moreover, the articles of association of the company can also provide for rules which regulate the transmission of the undivided shares. Since May 1, 2019, entrepreneurs have more room for organizing the transfer of their businesses.

Obviously, the incorporation of a company does not solve all conflicts between your heirs. However, it can help to prevent contestations.

Many entrepreneurs take steps towards organizing their business as a company for tax reasons. Generally, you can allege that the highest tax rate for corporations is a lot lower than the tax rate applied to personal income (to which a one-man business is subject). Moreover, the switch to a company turns out to be a lot more favourable from a tax standpoint,  to the extent that you keep the largest part of the profit within your company.

The corporation tax is reserved to companies, associations, organisms and other institutions, which:

  • have ‘legal personality’;
  • have their residence for tax purposes in Belgium;
  • run a business or conclude transactions for profit-making purposes

As a self-employed person, you are subject to your own social insurance regime and you enjoy a specific social security scheme. Entrepreneurs with a one-man business always fall under this regime.

In a company, business managers, directors and active partners are considered as self-employed persons. They are also subject to the social insurance regime of self-employed persons.

Directors of a public limited company (NV) cannot be an employee at their company. This rule also applies, since May 1st 2019, for directors at private limited companies (BV) and for business managers of the former private companies with limited liability (BVBA’s). Business managers of a private limited company (BV) (or a private company with limited liability (BVBA)) cannot exercise management functions as an employee. This is still possible for another function which is completely separate from your task as director and under the following conditions: the activity which is the subject matter of the employment contract must be sufficiently distinct from the tasks as business manager/director;

  • There must be a subordinated employment relationship in place;
  • A salary as employee must be paid for the work performed which is totally separate from the management function



Closing a business

A company can be dissolved in three ways:

  • by a dissolution automatically by law (e.g. after the expiry of the term of the company);
  • by a judicial decision; or
  • voluntarily by a decision of the shareholders.

During the dissolution, a liquidator will sell the assets of the company to pay off the creditors with the proceeds. The balance which remains after payments to the creditors, accrues to the shareholders of the company. Upon the conclusion of the liquidation, the company loses its legal personality and ceases to exist.

A voluntary dissolution can also occur in a simple manner through the procedure of dissolution and liquidation in one deed. Through this procedure, the shareholders decide unanimously to dissolve at a moment in which all debts have already been paid  to the creditors. No liquidator is appointed and the remaining assets accrue, after the dissolution, automatically to the shareholders.

Additionally, it is also possible that the company may be declared bankrupt by the commercial court. The bankruptcy order can be issued if the company can no longer pay its debts and no longer obtains  credit from its creditors.

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