2.7.1.1 Profit distribution constraint: the asset-lock scheme

As explained above, VSO social enterprises are subject to a profit distribution constraint, which prohibits the distribution of any direct or indirect pecuniary benefit to the owners of shares and members of the enterprise as a matter of principle (see Sub-section 2.4). The owners of shares and members are obliged to clarify in the AoA that they are not committed to the pursuit of any pecuniary objectives. If they do pursue pecuniary objectives, they need to clarify that they will do so to a limited extent only. Where the owners of shares and members seek limited economic benefits, legislation stipulates that the payment of dividends should not exceed a regulated distribution cap. The distribution cap is a fixed rate applicable to the financial returns provided to the owners of shares and members. In particular, Article 661(3) of the Belgian Companies Code of 1999 requires a VSO to insert a profit distribution policy in its AoA, which explains how its profits will be allocated to pursue its social objectives.1

The subsequent payment and distribution of any dividends is limited on the basis of a fixed rate distribution that currently stands at 6% of the VSO’s total volume of assets. This fixed rate was introduced by means of a Royal Decree and in consultation with the National Cooperative Council.2