A legal framework for a worry-free partnership
When setting up a company with other people, it is important to define a framework so that you can carry the project forward together as far and as long as possible.
Three documents are available to help you manage your partnership:
- Articles of association
- Shareholders' agreement
- Charter
The articles of association
To set up a limited liability company (SRL, SCRL, SA), you need to draw up a deed of incorporation before a notary. The deed of incorporation includes the company's articles of association.
The articles of association contain a series of mandatory and formal requirements (name, form, duration, registered office, purpose, capital, securities), as well as a broad outline of the company's operating procedures that may be of interest to third parties (who is authorised to represent the company, rules governing general meetings, dissolution and liquidation procedures, etc.).
You can easily find examples of articles of association on the Internet. However, it is important for them to be carefully reviewed by your notary to ensure that they meet your needs, particularly with regard to the company's operating procedures.
The articles of association of existing companies can be consulted on the FETNOT website - Articles of association and powers of representation.
To find out more, visit the dedicated pages of Notaire.be and FPS Economy.
The partnership agreement
A partnership agreement is not a legal obligation, but it is strongly recommended, in line with the adage that "prevention is better than cure".
The partnership agreement sets out the way in which the company is managed, as well as the framework for resolving any conflicts that may arise between the partners. Unlike the articles of association, the partnership agreement is not public, since it regulates details that only concern the partners.
Both the company's articles of association and its partnership agreement regulate certain aspects of the company's management, so it is important to coordinate them. We strongly advise you to have the agreement reviewed by a legal expert in corporate law.
What topics should the agreement cover?
We recommend that you address the following points in particular. That said, it is important to have it reviewed by a corporate lawyer to ensure that it meets your needs and can address any situations that may arise.
- Determining the role of each partner. What will be the duties and responsibilities of active partners? What is expected of passive partners?
- Share-related rights. What rights are associated with each type of share?
- Distribution of dividends. What is the dividend distribution policy?
- Working hours. How many hours a week will each person invest in the project and on what schedule?
- Absences and sick leave. How much time off can each person take? Does a partner on sick leave continue to receive full pay, and if so, for how long?
- Remuneration. What is each person's expectation in the short, medium and long term? How long can each of the partners last before receiving their first pay? Which tasks are (un)paid? Do all tasks have the same value from the point of view of remuneration (e.g. what is the value of having connections and bringing in customers; of doing after-sales follow-up; of keeping track of accounts)? How and on what basis is each executive's remuneration assessed?
- Expenses paid by the company. What expenses are paid by the company? Does the company pay social security contributions for its managers? Does the company pay for any bike leasing?
- Non-competition clause if one of the partners leaves or if one of the partners carries out similar activities outside the company.
- Rules governing disputes between partners. It is preferable to include a rule requiring mediation (supervised negotiation) in the event of a dispute or disagreement. Ideally, the mediator should be named in the agreement itself.
- Procedure applicable in the event of shareholder withdrawal. You can include different clauses to govern the departure of a partner (pre-emption clause, non-transferability clause, approval clause, resale right, etc.). We also recommend setting out the valuation method (share pricing) to be used and agreeing on the valuation expert to be appointed in such a situation.
Template of a shareholders' agreement to complete - This document is only a starting template. You should adapt it to your own situation and add any elements you feel are appropriate.
The charter
Whereas a partnership agreement is concerned with the role of each party and the contractual rules, a charter is more concerned with the company's vision and rules governing relationships. It is also aimed at company employees.
In practical terms, this involves writing down:
- the partners' ambitions and vision for the company;
- the company's strategy for achieving its ambitions;
- the corporate values;
- discussion times. In other words, determine in advance the times when discussions will take place, whether concerning relations between colleagues, the evolution of the company's figures (audit & reporting), the adaptation of the partnership agreement or charter, etc. An external consultant can be appointed to structure these conversations.
The point of drafting the charter itself is to make it possible to identify points of consensus, as well as those on which there is no consensus at all. And so avoid future conflicts resulting from differing visions.
The special case of a family business
In the context of a family business, a family charter is an agreement signed by the company's family partners and laying down certain rules for current and future generations.
This charter aims to maintain good family relations and avoid conflict.
For example, it could include the conditions for creating jobs for family members or the process for recruiting a family member (e.g. calling in external HR so as not to bias the process).
Lastly, remember that a conflict or disagreement is never problematic; it is how it is managed and resolved that can become problematic.
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