Legal Forms of Businesses in the Netherlands

The economic policy in the Netherlands is favorable to entrepreneurship, which is why new businesses are established here every year. To optimize profits and administrative costs, it’s important to choose a business form that suits the specifics of your business well in advance.

What is legal personality, and which legal form will be best suited to your type of business? Below, we present the different legal forms of companies that can be established in the Netherlands.

Want to simplify your administrative duties? Regardless of the legal form of business you choose, take advantage of a convenient invoicing program.

Learn how to start a business in the Netherlands step by step HERE.

Non-Legal Personality Businesses

For these types of businesses, the owner is personally liable for all the company’s obligations. This means there is no distinction between the assets of the company and the individual.

Sole Proprietorship (Eenmanszaak, ZZP)

This is the simplest and most popular form of business.

Starting a business does not require a complicated procedure, and managing administration, with good organization, is quite simplified. Here, the support of a reliable accounting office and a good invoicing program is invaluable.

General Partnership (Vennootschap onder firma, VOF)

Want to act together with another entrepreneur? You can establish a VOF partnership.

This legal form does not require an initial contribution to start the business. However, asset liability is important, which is why this legal form is most often used for small family businesses.

Learn which insurance will protect you from the consequences of adverse events HERE.

Legal Personality Businesses

A company with a legal personality has the legal capacity, meaning it can make decisions, take out loans, and enter into contracts. At the same time, the company has assets that secure its operation.

Establishing a legal personality requires a notarial deed. To manage and represent a company with a legal personality, it is necessary to appoint a board.

Legal Personality Business in the Netherlands Private Limited Company. (Besloten Vennootschap, BV)

This form of business is where ownership is divided into shares. Company owners are not personally liable for the company’s obligations, and their liability is limited to their share of the capital. This is a popular form for medium and large enterprises.

Public Limited Company (Naamloze Vennootschap, NV)

This is a company whose shares are publicly traded and can be sold. This form is usually reserved for large corporations and requires a higher initial capital compared to BV.

Limited Partnership (Commanditaire Vennootschap, CV)

In this form of enterprise, there are two groups of partners: active (general partners), who manage the company, and passive investors (limited partners), who invest capital but do not participate in management. General partners are unlimitedly liable for the company’s obligations, while limited partners are only liable up to the amount of their contribution.

Association and Foundation

Although these are not typical forms of business, associations and foundations are also legally recognized and can conduct profitable activities.

Choosing the right legal form depends on many factors, such as the type of activity, the number of partners, capital requirements, and the level of risk acceptance.

Source: kvk.nl