Both the Criminal and the Insolvency Courts have the authority to have directors banned from holding a managing position in businesses (to act as director, external auditor, day-to-day manager, member of an executive committee, board of directors or supervisory board, liquidator of a legal entity or representative within a company or association) should they:

• Have committed one or more of the serious breaches listed under articles 1, 1bis, 2 and 3quater of the Royal Decree n°22 of 24 October 1934, including one or more criminal offences related to insolvency (offences committed with the aim of delaying bankruptcy), forgery, theft, extortion, embezzlement or breach of trust, swindling, etc.
• Have committed a gross and clearly established misconduct, having contributed to the occurrence of the bankruptcy of the company, which they were managing.

In the past, the lack of follow-up to convictions unfortunately allowed many people to defy the director bans imposed on them with impunity.

To remedy this, a law passed on 4 May 2023, which came into force on 1 June 2023, now creates a Central Register of Director Bans.

This is an automated database which will record, store and modify data regarding director ban convictions.

The purpose of this register is to enable the public authorities as well as third parties to verify whether directors, managers, external auditors, day-to-day managers, members of an executive committee or board of directors or monitoring committee or liquidators of a legal entity, representatives for branch activities or candidates for the aforementioned positions are not subject to a ban on exercising these positions.

The new Central Register of Director Bans will have to be consulted when setting up companies or appointing members of boards of directors. Companies and associations will be required to draw up and sign an additional declaration certifying that no management ban has been issued by a Belgian or foreign court.

For further information on this subject, please do not hesitate to contact Mr Frédéric PAQUE.