Solution

Dematerialisation (getting rid of bearer shares)

Specifics Advantages Good to know

Until 2015, most equities or bonds issued by Belgian limited companies (and limited partnerships with shares) were bearer securities. As a document without a name, they belonged to the “bearer”: simply possessing them was sufficient to establish ownership. It was easy to transfer them by giving them to someone else as a gift

Since 2015, bearer securities have no longer existed. They have been replaced by either registered shares (represented by an entry in a register maintained by the issuing company), or by demat securities (represented by an entry in a custody account with a financial institution).

What happens to the paper bearer shares that are still in circulation today?
Paper securities have lost their status as bearer securities. Anyone holding them needs to contact the company that issued them, who will be able to tell them what they need to do. The company will often simply refer the holder of the paper security to the national Caisse des Dépôts et Consignation (Deposits and Consignments Fund), where either the securities themselves, or the proceeds of the sale of the securities will normally be held, and can be recovered by paying an administrative fee (10% per year applied since 2015).
Demat or registered securities: How do I choose?
Belgian limited companies and limited partnerships may now only issue registered shares or demat securities.

By default, shares are registered and all limited companies and limited partnerships have to manage a list of registered shareholders (or bondholders) which includes all shareholders (bondholders).

However, a limited company or limited partnership can enable its shareholders (bondholders) to hold demat securities in a custody account.

	Dematerialised securities	Registered securities
Anonymity of shareholders	Only the bank, which has an duty of discretion, knows the identity of the holders of securities.	Any holder of securities may view the register, where your company must list the identity of holders and the number of securities that they own.
Succession planning	Can be transferred by transfer between accounts (= donation by bank transfer) which makes it possible to avoid gift taxes under certain conditions.	The gift requires a notarial deed, filed in the register of securities. It is subject to gift tax.
Payment of dividends	Thanks to the supervisory institution, the shareholders' current account can be credited automatically.	The company pays each shareholder directly by bank transfer or by issuing dividend cheques.

Choosing demat securities involves administrative costs and constraints. If you would like to allow your shareholders (bondholders) to hold demat securities, you need to:
1. amend your company's articles of association: The existence of dematerialised securities must be explicitly stipulated in the articles of association.
2. choose a supervisory institution: A supervisory institution is a centralising entity that is located at the head of the pyramid-shaped structure designed for handling dematerialised securities.
3. publish the name of your supervisory institution in the Belgian Official Gazette.
4. register the demat securities in the name of the party at the Top of the Pyramid in the register of shareholders.
A company can always change its mind and switch from one status to another. Of course, abandoning the ‘demat’ status would mean that shareholders (bondholders) who hold their securities in a custody account with a bank would have to "transfer" their securities to the shareholders' register.