According to Belgian Company Laws, Belgian companies can, in addition to capital shares, issue profit shares. Profit shares do not represent the corporate capital. They are often issued in exchange for a contribution of labour or services outside of the company's statutory capital. Profit shares can also be issued in exchange for a contribution in cash outside the company's statutory capital. In such case, they are called certificates of participation, "C.P.C." ("participatiecertificaten - certificats de participation"). They can take the form of registered shares or bearer shares.
Profit shares only give title to a dividend or a possible liquidation distribution if the charter of the company explicitly provides for it. Moreover, profit shares possess only limited voting rights. Except if the charter provides otherwise, the holders of profit shares are only entitled to vote on a decision to change the company's corporate purpose, to change the rights of a category of company shares or to transform the corporate form of the company.
Profit shares can only be freely transferred as of the tenth day following the filing of the second annual accounts after these profit shares' issuance. Until said period has elapsed, they can only be transferred by a notarial deed or a private deed notified to the corporation within one month of the transfer. The corporate charter or a shareholders' agreement may limit the transferability of profit shares.
The content of this article is intended to provide general information on the subject matter. It is therefore not a substitute for specialist advice.
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