The shareholders’ register in Belgium – Ceci n’est pas un actionnaire

Anno 2018, the ownership of Belgian registered shares is still proved on the basis of a – Napoleonic – paper register. Every company should keep a register at its registered office to record all share transactions handwritten. This handwritten paper shareholders’ register is however a source of many problems, administrative burden and legal uncertainty. The only innovation that has occurred since the 19th century is the replacement of the quill pen by a Montblanc. It is about time for a reliable digital alternative, isn’t it!

Kafka is never far away 

The disadvantages of a paper shareholders’ register are numerous and often result in Kafkaesque situations in corporate practice. A shareholders’ register risks

• to be rarely up to date and illegible;

• to exist in several deviating versions;

• to be very prone to human errors;

• to get damaged, mouldy or lost;

In short, a paper shareholders’ register is actually totally unsuitable for what it is meant to be: providing legal certainty to shareholders and their company.

Moreover, a paper register is also very impractical: it is impossible to get a clear consolidated view on the shareholding of a company, nor to use the shareholders’ data in a different way than just to type everything manually.

Registration of securities

The Belgian tax on securities accounts (TSA) gives rise to a wave of registration of dematerialized shares. Such recording means that shares booked on a digital securities account must be entered in a paper register.

It might be fun for a Throwback Thursday among company lawyers, but to the companies and shareholders involved such operation goes hand in hand with as well practical as legal problems, extra administration, bureaucracy and legal uncertainty.

Ultimate Beneficial Owner (‘UBO’)

Soon – from 31 October 2018! – each company will have to report its ultimate beneficial owners (the so-called ‘UBO’) to the Belgian Federal Public Service of Finance.

An UBO report based on a paper register tormented by the troubles described above therefore looks like a recipe for disaster. Not least for company directors and managers. They bear the final responsibility and risk of liability for holding and updating the shareholders’ register, including the UBO reporting.

Spreadsheets as an alternative?

As an alternative to a paper shareholders’ register all sorts of spreadsheets are used. Nevertheless they do not have any evidential value. Spreadsheets can make shareholding structures more transparent, but the disadvantage is that authenticity and integrity of the shareholding data cannot be guaranteed. After all,  a spreadsheet is easily adjusted without any log of whom-what-when has changed, there is no version management and it is certainly not ‘tamper-proof’.

Digital shareholders’ register

It goes without saying that corporate business needs a reliable digital alternative to paper/spreadsheet shareholders registers.

The most important advantages of a digital shareholders register:

• tamper-proof digital recording of share transactions;

• a clear dashboard with a consolidated overview of a company’s shareholding in real time, or on any date in the past;

• secured access anytime and everywhere;

• a consultable log of executed share transactions (‘who-what-when’);

• transaction documents linked to each share transaction, easy to consult;

• automated generation and digital signing of transaction documents, registration certificates and corporate docs (e.g. with regard to general meetings such as convocation letters, proxies, waiver letters, minutes,..)

• Automated UBO reporting

Are you curious how our digital shareholders’ register will simplify corporate life?