How to Replace a Director: Resignation, Dismissal, Appointment

When you need to replace a director

Almost every company has to replace a director at some point. The trigger may be a resignation, a dismissal, the end of a term, a death or a reorganisation. The Code of Companies and Associations (CCA) governs each of these cases.

First, a word on terms. Since the CCA, the SRL no longer has a "manager" in the sense of the former SPRL: it has one or more directors. The old word manager remains common in practice, though.

In an SRL

Here, the general meeting sits at the centre of every change.

Appointment

The general meeting appoints directors, for a fixed or open-ended term. The articles can also name a director directly, known as a statutory director. A company can hold the mandate, provided it appoints a permanent representative who is a natural person.

Resignation

Directors can step down by informing the company. The departure must then appear in the Belgian Gazette. If the company drags its feet, the person resigning can in principle file proof of the resignation personally.

Dismissal

In principle, the general meeting can remove a non-statutory board member at any time. Someone named in the articles often enjoys stronger protection. So read the articles before you replace a director in that position.

In an SA

The SA offers several governance models:

• A sole director, alone at the head of the company.
• A board of directors, which decides collectively.
• The dual model, with a supervisory board and a management board.

The general meeting appoints and removes board members. In principle, it can remove them at any time, but the exit terms may provide for notice or compensation. If a seat falls vacant, the board can co-opt a replacement, whom the next general meeting confirms or not.

The procedure in six steps

The change becomes enforceable against third parties after publication. Until then, a third party acting in good faith can still deal with the outgoing board member. Our article on the Belgian Gazette explains the timing.

Consequences for the individual

Directors generally fall under the self-employed social security scheme. An appointment therefore means joining a social insurance fund, subject to exceptions. Check the situation on the INASTI website and in our guide to social-security contributions.

Conversely, the departing board member remains liable for acts carried out during the mandate. Our article on director liability covers those risks.

A worked example

Take a consultancy SRL with two directors. One retires and resigns on 30 June. The general meeting appoints her successor on the same day, who accepts in writing. The accountant files the form straight away, and the company updates bank signatories after publication.

When you replace a director with this kind of preparation, the change takes a few weeks, with no gap in the company's representation.

Common mistakes

• Failing to publish a resignation, which then cannot bind third parties.
• Letting a departed board member keep signing for the company.
• Appointing a company as director without a permanent representative.
• Ignoring the articles, which sometimes set a minimum number of directors.

Each slip creates doubt about who can bind the company. If you replace a director and also change the articles, read our guide to amending articles of association. For formalities linked to the seat, see our article on the registered-office transfer.