Founder liability: the financial plan every SRL or SA needs

Why founder liability should concern you

Every SRL, SA or SC formation in Belgium requires a financial plan. The SRL and SA are the main limited company forms, and the SC is a cooperative. The founders hand the plan to the notary before incorporation. It shows that the resources put in are enough to run the planned activity for at least two years.

Since the 2019 reform, the SRL no longer has a minimum capital. The financial plan therefore plays a central role: it replaces the legal threshold with a demonstration tailored to the project. Founders who neglect it expose themselves to founder liability. For the SA, however, a minimum capital of €61,500 remains, fully paid up at incorporation.

What the Companies Code requires

The Belgian Companies and Associations Code sets a minimum content. For the SRL, Article 5:4 lists the following items.

The rules for the SA and the SC follow the same logic. The Code itself is available through the Belgian Official Gazette. Complete content is your first protection against founder liability.

How to write each part

Each part answers a question a judge or a banker may ask.

The activity and the assumptions

Describe the offer, the customers, the location and the launch timetable. Then link each assumption to a source: quotes, contracts, market prices, production capacity. Without documented assumptions, the plan loses most of its value as evidence.

Funding sources

List cash and in-kind contributions, bank loans, grants and advances from partners. Also state any guarantees given, such as a personal guarantee.

Balance sheets and the income statement

The opening balance sheet captures the company on day one. The projected balance sheets at twelve and twenty-four months show how it develops. The projected income statement measures profitability over those two periods. Our article on the key tables explains how these documents fit together.

The income and expenditure budget

This budget tracks money in and money out, ideally month by month in year one. It reveals cash dips caused by payment terms. Without it, nobody can see whether the company will meet its commitments, and the risk of founder liability grows.

How founder liability works

This is the heart of the matter. Suppose the company goes bankrupt within three years of incorporation. The court then examines the starting equity. If it was manifestly insufficient to run the activity normally for two years, the judge can make the founders bear part of the debts. The judge sets the proportion.

The notary keeps the financial plan. The notary does not publish it, but passes it to the court on request. A serious plan is therefore your best defence against founder liability. For other risks, read our guide to directors' liability.

Example: an IT consultancy SRL

Take a fictional, simplified example. Two partners set up an IT consultancy SRL.

• Resources: €20,000 of contributions and a €30,000 bank loan.
• Investments: €25,000 of equipment and fit-out, depreciated over five years.
• Opening cash: €25,000.

For year one, the projected income statement expects €120,000 of revenue. It deducts €20,000 of variable costs and €60,000 of pay. It then subtracts €27,000 of rent and fixed costs. After €5,000 of depreciation and €1,000 of interest, the result before tax reaches €7,000.

However, the budget shows a low point in month three, since the first clients pay at 60 days. The plan for this SRL therefore keeps a cash reserve. The founders thus reduce their exposure to founder liability.

Mistakes to avoid

These mistakes keep appearing in files.

• Overly optimistic projections, with no source.
• Forgotten expenses: insurance, licences, taxes, directors' pay.
• A neglected working capital requirement.
• Equity too thin for the pace of the activity.
• No cautious scenario.

Each mistake increases the risk of founder liability if the company fails early.

Who can help?

An accountant remains the best-placed professional to draw up a realistic plan. Their name then appears in the document, as the Code provides. A business formation adviser can also guide you through the assumptions. Finally, your banker checks consistency when you apply for credit. To find that professional, read our guide to choosing an accountant.

Preparing the plan with Juristelo

Juristelo structures your financial plan around the items the Code requires, through guided questions. Balance sheets, income statement and budget stay consistent with each other and export to Word or PDF. For the full method, also follow our seven-step forecast guide. You reduce the risk of founder liability at the same time.