2.5.1 The Belgian company with a social purpose (VSO)

The Belgian Companies Code of 1999 contains only few specific provisions regarding the governance of organisations with a VSO status.1 Governance provisions pertinent to social enterprises in the Belgian Companies Code of 1999 apply to the different business organisations and corporate legal forms with the VSO status.2

However, Article 661(4) and (7) prescribe an exception. Article 661(4) and (7) contain two legal provisions applicable to the governance structures of all organisations with a VSO label. Organisations with the VSO label are required to stipulate in their AoA that no owner of shares and/or member may participate in a vote in the general meeting of members (English translation for the Dutch term ‘Algemene Vergadering’ below referred to as the ‘general meeting’) where the number of votes any member casts will exceed one tenth of shares represented in such general meeting.3 The maximum number of votes is reduced to 5% when employees are owners of shares and members of the organisation and participate in the general meeting.

In the VSO, the decision-making power remains correlated with the financial participation of the owners of shares and members in the share capital of the organisation. However, the voting cap imposes a more democratic rule of representation in the processes of the general meeting by virtue of the fact that it: (i) eliminates the voting rights attached to some of the represented shares, and as such, control over decisions put to a vote cannot be aggregated to the owners of shares and members owning the largest part of the share capital; (ii) imposes a limit on the number of votes VSO owners of shares and members may exercise; and (iii) strengthens the voting rights of employees who are owners of shares and members. Coates and Van Opstal, two Belgian scholars, note that VSO social enterprises have the flexibility to stipulate more ‘stringent’ restrictions in their AoA to eliminate the voting rights of the owners of shares and members that could potentially result in the application of full democratic representation in accordance with the ‘one man, one vote’ rule.4

Additionally, Article 661(7) of the Belgian Companies Code of 1999 provides the employees of a VSO with a legal right to assume membership and ownership of shares after the completion of one working year.5 Article 661(7) stipulates an additional obligation for the VSO to establish an internal policy and special procedures to facilitate the provision of ownership of shares and membership to employees. Accordingly, the provision of ownership of shares and membership rights to employees is subject to various legal requirements.6