Parents who own a collection of works of art (paintings, porcelain, period furniture, etc.) wish to pass on these movable assets to their children at a lower tax cost and to avoid dispersal of this family heritage, while retaining management and control over the assets passed on and maintaining all or part of the income generated by these assets.
From this point of view, it may seem quite interesting to set up a simple company, formerly under common law (also called a civil company).
The contribution can concern all kinds of goods in kind (art objects and thus NFTs, literary or artistic property (“copyrights”), receivables, securities portfolio, etc.), in money or in industry.
- to create an undivided movable patrimony (art collection) without fiscal cost
- to avoid the dispersion of the art collection and to prevent conflicts between successors
- Maintain control and management over the assets passed on to the founders (parents or aunts/uncles)
- to ensure that the founders enjoy the undivided property (income), and thus guarantee them a certain standard of living
- to transfer the ownership of all or part of the undivided shares (by donation) to the successors who will become partners, and thus, to plan the succession of the donors
- at the liquidation of the common law company, to distribute the undivided movable assets without any transfer tax consequences and with a reduced division duty (1% in the Walloon Region and Brussels-Capital Region; 2.5% in the Flemish Region) if real estate has been acquired by the undivided ownership after the company was formed.
The Companies and Associations Code (CSA) merges the three contractual companies without legal personality (the general partnership, the temporary partnership and the internal partnership) into a generic company form without legal personality: the simple partnership.
It is still possible to form temporary simple companies or internal simple companies by contract.
The simple partnership is characterized by the absence of any legal personality and cannot sue or be sued. It does not have its own assets and enjoys the regime of fiscal transparency, so that it will not be subject to any taxation as a company and the partners will be taxed as individuals.
The general partnership (SNC) and the limited partnership (SComm), which have legal personality, are governed by a book of the SHA which is common to the simple partnership (Art. 4:22 SHA: The simple partnership whose partners agree that it shall have legal personality shall take the form of a general partnership or a limited partnership)
The simple or civil company is thus a company without legal personality.
In order to exist, it requires that two or more persons called partners agree (orally or in writing) to pool their contributions in order to share the direct or indirect patrimonial benefit that may result.
The existence of a civil or common law company presupposes the meeting of the following conditions:
- a plurality of partners (minimum: 2)
- the contribution of goods by the partners
- the existence of a profit motive on the part of the partners
- participation in profits and losses by all associates
- the will to pool assets, on the part of the partners (“affectio societatis“).
The partners of a simple partnership are bound to third parties in an unlimited manner by the commitments of the partnership.
It should be noted that although it escapes many of the legal formalities that can burden companies with legal personality, since November 1, 2018, the simple company must register in the ECB as a company subject to registration before it begins operations. This registration process is carried out via a business window.
The LRE prescribes that the simple partnership must henceforth, like any other company under Belgian law, meet (a.o.) the following conditions:
- a registration with the Crossroads Bank of Enterprises (CBE);
- accounting (simplified or double); and
- a registration of the beneficial owners of a simple company in the UBO register.
Finally, the death of the partner of a simple partnership without legal personality leads to the debiting of inheritance tax, since this type of partnership does not have legal personality and can be compared to a simple joint venture. The assets contributed (pooled) to this type of company or association without legal personality will be included in the basis of assessment for inheritance tax, in proportion to the deceased’s rights in the said company or association.
More information?
- Federal Public Service Justice
Economic Rights Department
Boulevard de Waterloo 115
1000 Bruxelles
Tel. : +32 2 542 65 11
E-mail : info@just.fgov.be
Federal Public Service Justice website - Royal Federation of Belgian Notaries
Rue de la Montagne 30 – 34
1000 Bruxelles
Tel. : +32 2 505 08 50
FRNB website
Advantages of a simple company to manage and transmit your NFTs within a COLLECTION:
- Possibility of drawing up the contract under private signature (no need to go to the notary)
- Transparent taxation
- Transmission of undivided shares according to the contributions made
- Management maintained by the founders
