Do you wish to get rid of a shareholder of your Belgian Private Limited Company (SRL/BV)?

It can be done — but certain conditions must be met

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  1. Shareholder disputes – A common issue with serious consequences

Conflicts between shareholders in private limited companies (SRLs/BVs) (and even public limited companies (SAs/NVs)) are quite common.

Unfortunately, the solutions are rarely simple and almost always expensive.

In many cases, these disputes threaten the company’s very existence — business partners who were once friends often end up parting ways permanently.

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  1. At the root of the disputes: the unasked “what if?” questions

Shareholder disputes often arise in companies that, at the time of incorporation, never addressed some essential questions such as:

  • What if we stop agreeing on major decisions?
  • What if I want to sell my shares? Do others have a right of first refusal? How is the value determined?
  • What if we disagree on who should manage the company?
  • What if some prefer to distribute profits while others want to reinvest them?
  • What if I no longer wish to take part in management?
  • What if one partner fails to meet their obligations — capital, work, or contacts?
  • What if someone breaches an agreement or acts against the company’s interests?
  • What if a partner becomes incapacitated or dies? Who inherits their shares?
  • What if a partner sets up or joins a competing business?
  • What if there’s a decision-making deadlock — is there a “casting vote” or mediation mechanism?

Failing to address these questions in the beginning often leads to serious problems later on.

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  1. Prevention – The best protection

If you have considered these questions when forming your company, many potential disputes can be prevented or at least resolved amicably.

If not — whether due to lack of time, willingness, or resources — or if the mechanisms provided in the articles of association are insufficient, Belgian law allows, under certain conditions, the exclusion of a shareholder at the expense of the company’s own assets.

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  1. The legal basis for excluding a shareholder in Belgium at the expense of the company’s own assets

Belgian law allows the exclusion of a shareholder at the expense of the company’s own assets for just cause (“juste motif / gegronde reden”).

This mechanism was introduced as part of recent company law reforms, notably when the legal framework for cooperative companies was modernised.

Previously, anyone could set up a cooperative (SCRL) with minimal requirements and high flexibility. The reform restricted that status to entities with a genuine cooperative purpose. Others were required to convert into private limited companies (SRLs/BVs) and if they didn’t, they were automatically transformed.

Because cooperatives already allowed the exclusion of members, the legislator decided to extend this possibility to SRLs/BVs as well, thereby opening the door to statutory exclusion of a shareholder at the expense of the company’s own assets.

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  1. Conditions for such exclusions

Such an exclusion is only possible if the following conditions are met:

  • the company is a Private Limited Company (SRL/BV) and
  • the articles of association expressly allow for removal.

The removal must be based on a justified reason, which may be defined in the articles.

Examples of just cause include:

  • serious breach of duties towards the company (contractual or statutory violations),
  • engaging in competing activities or disclosing confidential information,
  • acting against the company’s interests,
  • blocking the company’s decision-making bodies,
  • a persistent conflict making joint management impossible.

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  1. Procedure and consequences

The decision to exclude a shareholder at the expense of the company’s own assets must be taken by the general assembly. In other words, the shareholder seeking the exclusion of another shareholder must, alone or together with others, hold the required voting majority. During the procedure, all legal formalities must be strictly followed.

After the exclusion, the company cancels the shares of the excluded shareholder and pays out their value from its own assets, based on the latest approved annual accounts, unless the articles provide for a different valuation method.

👉In practice, this value is often lower than the market value, and payment cannot be made if it would endanger the company’s liquidity or solvency.

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  1. If the company is not an SRL/BV or when the statutes contain no provision for the exclusion of a shareholder

If the company is a Public Limited Company (SA/NV) or a Private Limited Company (SRL/BV) without a removal clause, the only option is to request judicial exclusion through the court. This procedure is significantly more complex and time-consuming.

The court will only grant removal if there is a serious and specific reason demonstrating that the shareholder’s continued presence would seriously harm the company.

In that case, the value of the shares is determined by a court expert, based on market value, and the requesting party must prove that the removed shareholder is responsible for the situation (e.g., decision-making deadlock or paralysis of management).

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If you find yourself in such a situation, consult a lawyer.

Tristan KRSTIĆ

Lawyer

Faber Inter Legal

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