SRL financial plan in Belgium: obligations, content and founder liability

Key takeaways

• The financial plan is mandatory for any SRL — Article 5:4 §1 CAC — and is deposited with the notary at the time of incorporation.
• It must cover the first two accounting years and justify the adequacy of the initial assets for the planned activity.
• In the event of bankruptcy within three years, founders may be personally liable for all or part of the company debts, in a proportion determined by the court, if the initial assets were manifestly insufficient (Art. 5:16 2° CAC).
• No legally imposed format, but the IEC has published a reference model that the vast majority of professionals use.
• Contrary to a common misconception, the absence of minimum capital does not eliminate the financial plan obligation.

The financial plan is often perceived as a mere formality at the time of incorporating an SRL. It is in fact a document with real legal weight: it is the founders' commitment to the adequacy of the means they are endowing their company with, and it can be used against them if the company goes bankrupt within three years. This guide sets out the legal framework, the content expected by professional practice and the concrete stakes for founders.

The legal framework: Article 5:4 §1 CAC

The Companies and Associations Code (CAC), which entered into force on 1 May 2019, establishes the obligation in unambiguous terms. Article 5:4 §1 CAC provides:

"Before the deed of incorporation, the founders must draw up a financial plan in which they justify the amount of the initial assets of the company to be incorporated in the light of the planned activity of the company for a minimum period of two years."

Three elements of this text deserve attention.

Before the deed: the plan must exist before the notarial deed is signed. It is not a document to be produced after incorporation.

Justify the initial assets: the plan does not consist in choosing an arbitrary amount; it must demonstrate, with financial projections, that the planned resources are consistent with the envisaged activity. This is the difference between a mechanical formality and a genuine business analysis.

For a minimum of two years: the plan covers at least the first two accounting years, not just the first. This time horizon is not accidental: it corresponds exactly to the liability period of Article 5:16 2°.

No minimum capital, but a mandatory financial plan

Since the reform of company law by the CAC, the SRL no longer requires a minimum capital. This is an undeniable advantage compared with the old SPRL, which required €18,550 with a minimum paid up share of €6,200. But this flexibility must not be misunderstood.

The absence of a legal minimum does not mean that you can incorporate an SRL with negligible resources. The financial plan requires you to demonstrate that your initial assets — whatever their amount — are sufficient for the planned activity. An SRL incorporated with a capital of €1 that cannot justify its adequacy for a real activity would be in a fragile legal situation.

Content of the financial plan: expected elements

The CAC does not impose a standardised form, but it specifies what the plan must justify. The IEC (Institute of Chartered Accountants and Tax Advisers) has published a reference model, widely used by accounting professionals. In practice, a complete financial plan includes the following elements.

Main components of an SRL financial plan

• Description of the planned activity

  Nature of the products or services, target market, business model. This section anchors the financial projections in an economic reality.

• Balance sheet projection

  Opening balance sheet at the date of incorporation, then projected balance sheet at the close of the first and second accounting years.

• Income and expenditure projections

  Projected income statement for at least two years. Justification of assumptions: turnover growth rate, direct costs, fixed expenses.

• Cash flow projection

  Monthly or quarterly cash flow plan for the first year, annual for the second year. Critical for detecting any cash flow gap in the early months.

• Financing plan

  Sources of financing: share capital, shareholders' current accounts, bank loans, public aids. Match with the financing needs identified.

• Explicit assumptions

  Every estimate must rest on identified assumptions: market growth rate, conversion rate, number of hours billed, average price. The more explicitly documented, the more defensible the plan.

The level of detail expected varies according to the complexity and scale of the planned activity. A consultancy creating an SRL with a single founder will not produce a plan identical in form to an industrial company with several investors. But the underlying logic is the same: demonstrate that the initial assets are adequate.

Founder liability: the concrete stakes of Article 5:16 2°

This is the most critical consequence of the financial plan. If several conditions are met simultaneously, the founders — and by extension any person who has acted as a founder in fact — may be held personally liable for all or part of the company's debts, in a proportion determined by the court.

1. 1

   Bankruptcy of the SRL

   Within 3 years of incorporation

   The company is declared bankrupt by the court. The administrator will examine the origins of the insolvency.

2. 2

   Causality assessment

   During the insolvency proceedings

   The court assesses whether the bankruptcy is attributable, even partially, to the manifest insufficiency of the initial assets.

3. 3

   Examination of the financial plan

   Evidence phase

   The notary communicates the financial plan. The court compares the projections with the actual situation.

4. 4

   Liability if manifestly insufficient

   Judgment

   If the initial assets were manifestly insufficient, the founders may be held personally liable for all or part of the company debts, in a proportion determined by the court.

"Manifestly insufficient" is a legal standard assessed case by case. The court looks at whether a normally prudent and diligent founder, placed in the same circumstances, would have endowed the company with more substantial means. A carefully drafted financial plan, resting on explicit and consistent assumptions, significantly reduces the risk of this qualification.

Drafting the financial plan: practical advice

The financial plan is not a free-hand exercise. Overly optimistic assumptions — "hockey stick" turnover, negligible fixed costs, instant break-even — are easy to pick apart in the event of litigation. Conversely, a plan that is too conservative may lead to questioning whether the initial assets are truly adequate.

The approach recommended by most accounting professionals is the following:

1. Start from reality: what resources do you actually have? What are the genuine commitments already identified (premises, staff, equipment)?
2. Build three scenarios: base, optimistic, pessimistic. The base scenario is the one retained in the plan; the others show that you have tested the sensitivity of your projections.
3. Calibrate the initial assets to the pessimistic scenario: if the company can survive a negative scenario for two years, the initial assets are adequate by definition.
4. Document every assumption explicitly: "turnover of €X because [market research, comparable, orders already taken]". The more traceable the source, the more defensible the projection.

Incorporating your SRL: from financial plan to registered office

Monsiegesocial supports you in the creation of your SRL, including the choice of registered office address and the administrative formalities with the CBE.

Incorporate my SRLOur domiciliation services

Further reading

• SRL or SA in Belgium: which form to choose?: comparison of the two main forms of capital companies, including capital and governance requirements.
• Company domiciliation or home address: the financial plan does not cover it, but the address of the registered office is to be decided at the time of incorporation.
• IEC reference model: available on the website of the Institute of Chartered Accountants and Tax Advisers and the ITAA.