New central register to detect dishonest entrepreneurs

Since 20 October 2023, a new register has become operational that allows public authorities, notaries and citizens to verify whether prohibitions to exercise a mandate as a director have been imposed on certain persons. A centralised register will result in increased transparency, which will make it possible to expose dishonest entrepreneurs or directors more quickly and verify whether managerial prohibitions imposed are effectively respected.

What are 'managerial prohibitions'?

Function holders of companies, not-for-profit associations (ASBLs), international not-for-profit associations (AISBLs) and foundations can be condemned to a prohibition to hold office for a certain period of time. The term 'function holders' includes directors, managers, auditors, delegates to the daily management, members of executive committees, management boards, supervisory boards, liquidators of legal entities, representatives for the activities of a branch or the candidates for appointment to such positions. They may face such prohibitions as a result of both criminal convictions (such as forgery, fraud and abuse of trust) and civil convictions (in the context of bankruptcies). These prohibitions typically extend over a time frame of three to ten years.

Why is this register of managerial prohibitions being introduced?

Until recently, it was fairly easy for convicted entrepreneurs to keep their convictions hidden from citizens and other entrepreneurs. Although such convictions were published in the Belgian Official Gazette before 1 August 2023, these publications were soon buried among other publications. This lack of control inspired the European legislator to take action and impose obligations on the member states. By introducing the Law of 4 May 2023, Belgium is complying with its European obligation. The Law has been in force since 1 August 2023, but its implementation took some time. Since 20 October 2023, the register can be accessed via the new application 'JustBan' on Just-on-web, though for now only for criminal convictions.

Who can use the register?

Public authorities such as enterprise courts, police forces and notaries will have full access to the register. This will allow them to retrieve the name of the convicted person as well as to verify the duration and reasons for the managerial prohibition. Citizens will also have access, albeit more limited. They will only have access to the name of the convicted person and the start and end dates of the prohibition. Due to a system of linked registers, it will also be possible to trace convictions in other member states.

So what obligations are implied by this?

This additional transparency entails an additional obligation for enterprises. They need to file an additional declaration with the clerk’s office of the competent enterprise court if they wish to publish the appointment of a function holder (director, delegate to the daily management, etc.).This declaration confirms that the appointed function holder has not been convicted of the offences mentioned in the Law of 4 May 2023. If one does not add this declaration, the clerk’s office should report it to the Indictment Chamber. If a managerial prohibition was imposed against a person, the clerk’s office will refuse the filing and the publication of the appointment.

If you have any questions or would like more information, please do not hesitate to contact us: 
yvette.verleisdonk@aurionlaw.be
sarah.verschaeve@aurionlaw.be
lisa.bueken@aurionlaw.be
kaat.vanderschueren@aurionlaw.be