When am I a UID?
The definition of UID can be found in article 2, point 18 of the GBER and is based on a number of concepts arising in your company’s annual financial report. Here, a distinction is made between SMEs and large enterprises.
So, first of all, you have to determine whether your undertaking is an SME or a large enterprise. This may seem trivial as there’s a clear EU definition of this (there’s also a fiscal definition, but that doesn’t apply here): SMEs employ fewer than 250 people and have an annual turnover not exceeding €50 million or a balance sheet total of a maximum of €43 million. However, it isn’t always as simple as it appears:
An ‘autonomous’ enterprise only achieves SME status if it exceeds these thresholds over two successive accounting periods. But if one or more other enterprises hold 25% or more of the capital or voting rights, you’re no longer considered an ‘autonomous’ company. The figures for these partner enterprises (25% to 50% of the capital or voting rights) then have to be taken into account when testing against the criteria mentioned above - pro rata or in full in the case of linked enterprises (more than 50% of the capital or voting rights). Enterprises that exceed the SME thresholds due to their shareholder structure can lose their SME status instantly.
Once the SME character is clear, it’s relatively simple to determine your UID status. Here’s how:
1. All enterprises (SMEs and large enterprises) qualify as UIDs if:
a) “half of [their] subscribed share capital has disappeared as a result of accumulated losses. This is the case when deduction of accumulated losses from reserves (and all other elements generally considered as part of the own funds of the company) leads to a negative cumulative amount that exceeds half of the subscribed share capital.”
You can check this by working out the “own funds” (as specified in item 10/15 of the financial statements of a Belgian company) and the subscribed capital (item 100), which has to be > 0.5 in order not to be a UID.
Note that VLAIO includes non-called up and non-paid up capital when calculating own funds (item 101).
b) “the undertaking is subject to collective insolvency proceedings or fulfils the criteria under its domestic law for being placed in collective insolvency proceedings at the request of its creditors”;
c) “where the undertaking has received rescue aid and has not yet reimbursed the loan or terminated the guarantee, or has received restructuring aid and is still subject to a restructuring plan”;
2. Further criteria apply for large enterprises. The GBER stipulates that they also qualify as UIDs where they have fulfilled the following criteria for the past two years:
a) the company's book debt to equity ratio has been greater than 7,5
For this purpose, equity/own funds can be determined as described above. For Belgian companies, book debt can be calculated by adding together “Provisions and deferred taxes” (code 16) and debt (code 17/49).
b) the company's EBITDA interest coverage ratio (=interest expenses; code 650 for Belgian companies) has been below 1,0.
The above aspects are typically analysed by the subsidising authority based on the last available (interim) financial statements, certified by an auditor.
Since the introduction of the Companies and Associations Code on 1 May 2019, it is possible to set up companies without capital, where there is no subscribed capital, but “investment other than capital”. It’s not quite clear yet how subsidising authorities are to deal with this in view of the UID criteria. Since the lawmakers introduced the notion of ‘initial capital’ in the new Companies and Associations Code, the classic concept of capital is no longer relevant by definition. The most prudent approach would be to treat the item ‘investment’ as equivalent to ‘capital’.
As of 1 March 2021, VLAIO uses the term “inbreng” (“investment”), see the latest order of the Flemish Government (cabinet 26 February 2021).