On the joint and several liability for full payment by transferors and transferees of shares that have not been fully paid up

When a BVBA was incorporated, there was an option not to pay up the share capital of the newly incorporated company in full immediately. 

When the partly paid-up shares were then transferred, the question arose, at the time a request/claim for full payment was made – often when the company was declared bankrupt – as to who still had to bear responsibility for that payment: the transferor or the transferee?

The since repealed Companies Code contained only an explicit answer to this question for the NV, namely that “the transfer of not fully paid-up shares (…) [cannot] release the subscribers from the obligation to contribute, up to the unpaid amount, to the debts existing before publication of the transfer”.

The silence of the legislator with regard to the BVBA kept case law and legal scholarship occupied for decades. Broadly speaking, three different approaches emerged:

1. Analogous application of the statutory scheme for the NV to the BVBA;
2. The transfer (whether or not proven solely by an entry in the share register) released the transferor;
3. Novation of debt: in addition to the registration of the transfer in the share register, the company’s consent was also required to release the transferor.

In the run-up to the new Code of Companies and Associations, the legislator did not overlook this debate and the legal uncertainty that came with it, and introduced a new provision (Art. 5:66 CCA) as follows:

“In the event of the transfer of a not fully paid-up share, the transferor and the transferee, notwithstanding any provision to the contrary, are jointly and severally liable towards the company and towards third parties for the full payment. In the event of successive transfers, all successive transferees are jointly and severally liable.”

The discussion thus seemed to have been settled once and for all, were it not that one debate had in the meantime been exchanged for a new one.

This raised the question in case law and legal scholarship whether this new provision can or cannot be applied to private limited companies (and transfers/acquisitions of not fully paid-up shares in those companies) dating from before the entry into force of this new provision, i.e. 1 January 2020.

In an interesting judgment of 16 January 2023 by the Ghent Court of Appeal, the Ghent Court of Appeal held, with reference to Cass. 5 June 2014, that “as a rule, a new law applies not only to situations arising after its entry into force, but also to the future effects of situations that arose under the former law and that occur or continue under the new law, insofar as that application does not prejudice rights already irrevocably established”.

Thus, the Court of Appeal held that the new Article 5:66 CCA – as a mandatory provision – applies to all already existing companies as from 1 January 2020, i.e. the date of entry into force of the new CCA (and of Article 5:66 CCA).

In this case, there were repeated transfers and acquisitions of not fully paid-up shares (already from 2016), thus long before the joint and several obligation to pay up introduced as of 1 January 2020 came into play.

At the end of 2020, the BV(BA) goes bankrupt and the bankruptcy trustee invokes the aforementioned new statutory provision to call upon the transferors and transferees to pay up. The court of first instance ruled in the trustee’s favor, and this has now been confirmed by the Court of Appeal:

“The trustee must therefore rely on the legislation applicable at the time of the bankruptcy to determine who is obliged to fully pay up the capital, more specifically the CCA. Moreover, the recovery by the bankruptcy estate of the capital still to be paid up took place after the entry into force of the CCA, namely for the first time on 14/12/2020, so that both the transferor and the transferee are jointly and severally liable for the full payment pursuant to Article 5:66 CCA, as rightly held by the court of first instance.”

And:

“As a third ground of appeal, the appellant argues that he is released from his #volstortingsplicht, claiming that in a BVBA the transferors are no longer obliged to fully pay up once the transfer is enforceable against the company, including by its registration in the #aandelenregister. This argument fails, given that pursuant to Article 5:66 CCA the appellant remains obliged to fully pay up the shares that have not been fully paid up, despite their registration in the share register.”

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