SRL or SA: What legal status to launch your startup in Belgium?

Did you know that 77% of Belgian financing rounds concern the early stage, revealing a dynamic startup ecosystem but also specific challenges in terms of legal structuring? The choice between the Limited Liability Company (SRL) and the Limited Company (SA) represents a crucial decision which will directly impact your financing capacity, your governance and your future development. Since the reform of the Code of Companies and Associations in 2019, these two legal forms offer distinct possibilities adapted to different entrepreneurial profiles. Maître Innocent TWAGIRAMUNGU, with his expertise in corporate law in Brussels since 2005, guides you in this comparative analysis to make the most relevant choice according to your ambitions.

• The SRL allows the creation of a business with 1€ of capital and authorizes contributions to industry (valued expertise), ideal for early-stage startups with few financial resources
• The reduced tax rate of 20% on the first €100,000 only applies to SMEs meeting 4 strict criteria (less than 50 employees, less than €9M turnover, less than €4.5M balance sheet, executive remuneration of at least €45,000)
• The liability of directors is capped between €125,000 and €12M depending on the size of the company, except in the event of fraud or habitual misconduct.
• The liquidation reserve in SRL allows taxation at only 5% after 5 years (compared to 30% for traditional dividends), but will increase to 6.5% for new constitutions from 2026

SRL or SA: understand the impact of minimum capital on your initial cash flow

The difference ofminimum capital requiredoften constitutes the first decision criterion for entrepreneurs. The SRL can be created with only a symbolic €1, while the SA requires a minimum capital of €61,500. This fundamental disparity directly influences your ability to quickly start your business. An additional little-known advantage of the SRL: it authorizescontributions to industry, allowing shares to be issued in exchange for expertise or know-how, evaluated by a company auditor according to the same rules as contributions in kind.

Beyond social capital,incorporation costsrepresent approximately €2,000 for an SRL, to which are added the obligatory annual accounting fees ranging between €2,000 and €4,000. For a young startup with a tight budget, these amounts can make the difference between launching your project immediately or having to wait several additional months. Imagine that you are developing an innovative mobile application: with an SRL, you can start with less than €5,000 in your pocket, whereas an SA would require at least €65,000 to cover the capital and initial costs.

The responsibility of founders: a crucial issue for the first three years

The legal protection offered by each structure differs significantly. In SRL, the founders can see theirpersonal liability incurredduring the first three years if the initial financial plan proves insufficient in the event of bankruptcy. This legal provision requires the drafting of a detailed and realistic financial plan from the outset.

SA offers more traditional limited liability, better protecting managers from the start. However, the SRL compensates for this apparent weakness through the mechanism ofdistribution test: each dividend payment must pass a double check of solvency and liquidity (capacity to pay due debts), thus protecting creditors throughout the life of the company. This protection is reinforced by the legal cap on the liability of directors between €125,000 and €12,000,000 depending on the size of the company, except in the event of fraud or habitual misconduct.

Please note:The automatic conversion of former SPRLs into SRLs was completed on January 1, 2024. Companies which have not regularized their statutes within 6 months risk incurring the personal liability of their directors in the event of a dispute.

Flexible governance or formal structure: adapt your organization to your needs

The governance structure represents a determining factor depending on the composition of your founding team. The SRL authorizes the appointment of asole administratorwithout time limit, ideal for projects carried out by one or two entrepreneurs wishing to maintain maximum decision-making agility. This flexibility also extends to the distribution of profits: the SRL allowsinterim dividend distributionsthroughout the financial year, unlike the more rigid regime of the former SPRL.

The SA requires a minimum of three directors, barring specific exceptions, and offers three distinct governance models: the classic board of directors, the dualist system with a management board and a supervisory board, or the single administrator in certain cases. This apparent complexity can become an asset when you need to reassure institutional investors about the quality of your governance. For listed companies, the law of March 27, 2024 now requires the appointment of at least 3 independent directors from the second financial year following its entry into force.

An often overlooked but crucial aspect: the SRL allowscomplete dissociationbetween voting rights and financial rights. You can thus grant multiple voting rights to certain partners regardless of their financial contribution, a flexibility impossible in the old SPRL regime and particularly useful for rewarding co-founders providing their expertise rather than capital. The SA also offers this possibility for unlisted companies with shares with double voting rights, but this option remains limited to double voting rights for listed companies.

Practical example:A Brussels fintech startup has structured its capital as an SRL with class A shares for technical co-founders (industry contribution valued at €150,000 by the auditor) with 10 voting rights per share, and class B shares for investors (cash contribution of €100,000) with 1 voting right per share. This structure allows the founders to maintain control with 60% of the voting rights despite holding only 30% of the economic capital.

Raising funds: choosing between flexibility and scalability

The Belgian startup ecosystem invested 470 million euros in the first half of 2024, already exceeding the performance of the entire year 2023. Faced with this dynamic, the choice between SRL and SA directly influences yourability to access financing.

The SRL is ideal for raising less than €100,000, with the possibility of issuing convertible bonds and warrants. Restrictions on the transfer of shares make it possible to maintain control of the shareholding, an advantage for founders wishing to limit dilution.

The SA becomes essential for financing ambitions greater than €500,000. Therefree transfer of sharesfacilitates the entry and exit of investors, while the possibility of IPO opens unlimited growth prospects. If your artificial intelligence startup aims to raise several million euros, the SA represents the natural legal vehicle to attract venture capital funds.

Advice :For a first fundraising, choose the SRL which allows you to maintain control while attracting business angels. Provide from the start in your statutes the possibility of transformation into a SA when you exceed the threshold of €500,000 in financing. This planning will greatly facilitate the legal transition when the time is right.

Tax optimization: maximize your benefits according to your structure

The Belgian tax regime offers identical optimization opportunities for both legal forms, with a standard rate of 25% and areduced rate of 20%on the first €100,000 of profits for SMEs respecting four cumulative conditions: less than 50 workers on average annually, less than €9,000,000 in turnover excluding VAT, less than €4,500,000 in balance sheet total, and payment of a minimum remuneration of €45,000 gross annually to the manager.

These conditions include in particular the payment of a minimum remuneration of €45,000 gross annually to the manager, a threshold which can weigh on the cash flow of a young startup. The SRL, however, offers an exclusive advantage: the constitution of aliquidation reservetaxed at only 10% when it is allocated, then at 5% withholding tax after five years of waiting (this rate will increase to 6.5% for new constitutions from 2026), compared to 30% for a traditional distribution of dividends.

The VVPR-bis regime, applicable to shares issued against a cash contribution since July 2013, allows the withholding tax to be reduced from 30% to 15% after three years of holding. This optimization works for both structures but takes on its full meaning in an SA oriented towards fundraising. It is important to note that exceeding two of the following three criteria results in the obligation of an external audit: 50 employees, €9,000,000 turnover, or €4,500,000 total balance sheet, generating additional costs of €5,000 to €15,000 per year.

Stock options and talent attraction: a persistent Belgian challenge

The Belgian stock option regime remains unfavorable with a flat-rate tax of 18% of the market value, reduced to 9% under strict conditions. This taxation, considered excessive by 60% of startups founded in 2024, complicates the attraction ofinternational senior talents. Whether you choose an SRL or an SA, this problem remains the same and requires a creative compensation strategy.

The transformation of an SRL into a SA remains possible when your needs evolve, subject to a prior capital increase to reach the minimum required. This flexibility makes it possible to start modestly as an SRL and then move towards an SA when growth ambitions justify it. To support this development, it is recommended to consult an expert inbusiness creation and structuringwho can guide you through the legal and tax aspects of this transformation.

The choice between SRL and SA fundamentally depends on your growth and financing ambitions. Maître Innocent TWAGIRAMUNGU regularly supports Brussels entrepreneurs in this strategic reflection, analyzing their project from all angles: capital needs, desired governance, development prospects and tax optimization. His firm offers complete support from the drafting of statutes to the establishment of governance structures, including the optimization of your tax system. If you are launching your startup in Brussels or Belgium, do not hesitate to seek their expertise to make the choice best suited to your specific situation and legally secure your entrepreneurial adventure from the start.