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The Code of Economic Law (CEL) provides various co‑existing definitions of what constitutes a “business”. This is a direct consequence of the adoption of the law concerning the reform of business law.
A new definition of “business” was established in 2018. In theory, this new definition serves as the basic definition for the whole CEL. However, that is not always the case: the existing notion of a “business” was retained in the definitions in various books of the CEL as an exception to this new definition.
What Is a “Business” Under Article I, Book I of the CEL?
The law concerning the reform of business law modernised the notion of “business” in Belgian law. The notions of a “trader” or “merchant” were abolished, because they no longer corresponded to the current economic reality. At the same time, the definition of “business” was expanded.
Under Article I, Book I of the CEL, a “business” is defined as:
- Any natural person carrying out a professional activity in a self-employed capacity (such as a one-man business, a company manager, an artist);
- Any legal entity (a company, a non-profit organisation, or a foundation);
- Any other unincorporated organisation (such as a partnership).
What Is Not Considered to Be a “Business” Under Article I, Book I of the CEL?
The CEL clarifies which entities are not considered to be “businesses”, in particular:
- Any unincorporated organisation that does not pursue a distribution purpose and does not effectively make distributions to its members or to people who have a decisive influence on the organisation's policy (for example, de facto associations);
- Any legal entity under public law that does not offer goods or services on a market;
- Government Bodies: the federal government, the regions, the communities, the provinces, the rescue areas, the pre-areas, the Brussels conurbation, the municipalities, the multi-municipal areas, the territorial bodies within municipalities, the French Community Commission, the Flemish Community Commission, the Joint Community Commission and the public social welfare centres.
To What Does the Term “Business” Apply Under Article I, Book I of the CEL?
The definition in article I of Book I only applies to:
- Certain parts of Book III (Crossroads Bank for Enterprises, and accounting law);
- Book XX, in particular article I.22, 7/1 (insolvency law);
- The general jurisdiction of the business court.
What Is the Other Definition of a “Business” in the CEL?
In addition to the general definition in Article I, Book I of the CEL, another specific definition of a business is used for the purpose of specific separate books, as stated in the CEL of 28 February 2013.
According to that definition, a business refers to:
- Any natural person or legal entity pursuing a long-term economic purpose, including any associations of such persons.
Who or What is Considered to Be a “Business” According to this Specific Sefinition?
The specific notion of a “business” refers to any sustained economic activity.
Economic activity refers to the act of offering of goods or services on a particular market. This means: any natural person or legal entity that offers goods or services and thus engages in economic activity.
Activity indicates that it does not concern a single act but a sustained activity on the market, leading to competition with other businesses.
Neither the legal form nor the way a business is financed has an impact on the notion of a business. A business can be a natural person, a legal entity, an association, or a public person.
Consequently, any entity carrying out an economic activity may be considered to be a business. This is, therefore, a practical definition that requires a case-by-case analysis, unlike the general definition, which is based on specific categories.
To Which Books of the CEL do These Specific Definitions of “Business” Apply?
The specific definitions apply to:
- Book III, chapter 1 (transparency obligations of businesses),
- Book IV (protection of competition),
- Book V (competition and price trends),
- Book VI (market practices and consumer protection),
- Book XV (law enforcement),
- Book XVI (out-of-court settlement of consumer disputes),
- Book XVII (special legal procedures, in particular the injunctive relief).
Definition of “Business” and the Crossroads Bank for Enterprises
Although the legislator intended to establish a single definition of the term “business” that applies to all legislation, not all businesses at the Crossroads Bank for Enterprises (CBE) comply with this new definition. Consequently, the term “business” is no longer used since 1 November 2018. Instead, the term “registered entity” has replaced it.
In addition, the law concerning the reform of business law was expanded to include:
- The compulsory registration of unincorporated companies with the CBE,
- The data to be included in the CBE registration.
All “registered entities” that must register with the CBE are listed in Article III.16 of the CEL.
Law on the Reform of Business Law
The law of 15 April 2018 concerning the reform of business law was published in the Belgian Official Journal on 27 April 2018 became effective on 1 November 2018.
That law entails several changes to the existing regulations at CEL level, in particular:
- Changes to the enrolment and registration with the Crossroads Bank for Enterprises,
- An expansion of accounting obligations and insolvency legislation.
The law also introduces amendments to the Civil Code, the Criminal Code, the Judicial Code, and the Code of Companies and Associations.
