When a director carries out his or her activities through a management company, two legal levels come together. On the one hand, there is the directorship within the company. On the other hand, the practical and financial arrangements between the company and the management company can be set out in a management agreement.
Those two should not simply be lumped together. The directorship is governed by the Wetboek van Vennootschappen en Verenigingen and the articles of association, whereas the management agreement can further develop the contractual collaboration. Precisely that combination makes proper structuring important.
More than just the management fee
A management agreement typically covers far more than the fee alone. Also liability, duration, termination and confidentiality deserve a clear place.
As regards the fee, it may for instance be determined whether a fixed management fee, a variable component or additional remuneration will apply. It is important that the contractual arrangements align with the decisions taken within the company regarding the directorship and its remuneration. The Wetboek van Vennootschappen en Verenigingen indeed assigns the general meeting an important role in determining the conditions under which a directorship is granted, exercised and terminated.
A termination arrangement also deserves nuance. The end of the company-law directorship and the end of a separate management agreement are not necessarily the same. It is therefore useful to determine clearly how both relationships relate to each other and which arrangements continue to apply when one of them ends.
Who is actually the director?
When the management company itself is appointed as director , Belgian law contains an important mechanism that is sometimes overlooked.
A legal person that is a director must designate a natural person as permanent representative. That person exercises the directorship in the name and on behalf of the management company and must satisfy the same conditions as the director-legal person. This is therefore not merely someone who is sent to meetings: the permanent representative obtains their own company-law position.
It is moreover noteworthy that the same natural person cannot sit on the same governing body both in a personal capacity and as permanent representative of a legal person. That is a typical example of a rule that you will not find in the management agreement itself, but that nevertheless has a direct impact on how you organise the governance structure.
Corporate governance starts with clear roles
That is why corporate governance, compliance and proper entity management play an important role alongside the contract itself.
Who takes which decisions? When does someone act as director, and when are separate management services being provided? Which powers rest with the governing body, and which can be assumed operationally?
That delineation is not merely theoretical. A director acts as an organ of the company, and the law expressly provides that the legal person acts through its organs. For the company’s obligations, the director is therefore not automatically a personal contracting party.
That makes it useful to describe with sufficient clarity in a management agreement which services are provided contractually, without pretending that the agreement can rewrite the statutory powers and responsibilities of the directorship itself.
Liability deserves extra attention today
Since 1 January 2025 extra-contractual liability law has changed. Through Book 6 of the Civil Code, the former quasi-immunity of auxiliaries has largely disappeared. As a result, a director or management service provider engaged in the performance of a contract can, under certain conditions, be sued directly on an extra-contractual basis by the company’s co-contracting party.
That makes it useful to review existing management agreements. Liability clauses must after all align not only with the directorship, but also with the current rules on extra-contractual liability and with the contracts the undertaking concludes with third parties.
Appointment and termination sit alongside the contract
The formal side of the directorship also remains important. An appointment or termination of a directorship must take place in accordance with the rules applicable to the legal form concerned and in accordance with the articles of association.
The appointment and termination of directors and permanent representatives moreover form part of the data that, under the statutory rules, must be filed and published. A management agreement therefore does not replace that company-law decision-making and publication.
That is precisely why sound entity management follow-up is useful: the agreement, minutes, mandates, representation rules and publications must together reflect the same legal reality.
The management agreement as part of a larger whole
A strong management agreement does not ultimately stand on its own. It must align with the articles of association, the appointment decision, the allocation of powers within the undertaking and any arrangements between shareholders.
Recent rules on B2B contracts, the new law of obligations and the renewed liability law can also affect existing clauses. For example, provisions in management agreements between undertakings may not create a manifest imbalance between the rights and obligations of the parties.
It is therefore worthwhile not only to draw up such an agreement when a director starts, but also to review it when the undertaking grows, the governance structure changes or the collaboration evolves in substance.
Legal advice primarily provides legal certainty and coherence: it ensures that the contractual arrangements, the directorship and the broader corporate governance are aligned. For shareholders, directors and the undertaking itself, that creates a clear structure within which decisions can be taken efficiently.
