Company legal 12 May, 2023

Legal forms in Dutch corporate law

Crowe Peak/ Knowledge Hub/ Company legal/

Legal forms in Dutch corporate law

Legal forms in Dutch corporate law

Risks and opportunities in different legal forms and partnerships

From the BV to the nv, from the cooperative to the association: Dutch corporate law offers a lot of options when it comes to legal forms. In this article we take you through the main legal forms, and the benefits they provide and risks they present. In addition, we pay attention to the legal forms that foreign trading partners may have, to the consequences that the choice of a legal form can have in case of bankruptcy or when attracting financing in the Netherlands, and we dive deeper into the importance of structuring in the most optimal way when you work with multiple BVs/PLCs. But first, what is the importance of choosing the right legal form?

The importance of choosing the right legal form

Choosing the right legal form for your business is an important decision that has implications for your business, and sometimes for you personally. This is because the legal form chosen determines the legal and tax structure of the business. Moreover, it may affect the liability of the owner(s) (see below), the tax obligations and the possibilities of raising capital. Therefore, it is important to make the right consideration and choose the legal form that best suits the objectives and needs of the new company to be formed. Good advice from a legal or tax advisor can help you with this.

Crowe Peak is happy to be your trusted advisor when it comes to legal forms.

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Legal forms with and without legal personality

The most relevant distinction between legal forms is that there are legal forms with and without so-called “legal personality” (rechtspersoonlijkheid). When a company has legal personality, it can have rights and obligations independently, separately from those involved in the organization. This enables the company, for example, to enter into contracts, to own things, as well as to be sued. 

More concretely, this also means that if an incorporated company has debts, creditors can claim only the company assets and not the personal assets of the company’s owners or directors. This concept of protected assets (afgeschermd vermogen) is an important principle within corporate law, and it ensures that entrepreneurs can take risks without having to bear personal financial consequences. With every legal form discussed further in this article, we will therefore also pay attention to the question of what the chosen legal form does for the possible personal liability of the people involved in the company.  

Dutch legal forms; an overview

The following is an overview of the legal forms used in the Netherlands.

Sole proprietorship (eenmanszaak) (no legal personality)

More than one million sole proprietorships (eenmanszaken) are registered in the Netherlands. This immediately makes it the most common legal form in our country. The name of this legal form says exactly what it is: it is a business run by one person, a legal form in which the entrepreneur behind it is the sole owner and the de facto manager. This entrepreneur is personally liable for all debts and obligations of the business. This means that, for example, in situations of bankruptcy or debt, he/she can also be sued in private. Another important aspect of a sole proprietorship is that the owner is responsible for all aspects of running the business. This includes finances, administration, and tax returns, but also the actual work/delivery of a service/delivery of the goods to which the business commits. He/she can, however, employ (unlimited) staff. However, this does not alter the fact that the entrepreneur remains responsible. In fact, one could say: the more personnel, the more (unclear) obligations for the entrepreneur.  

Pay attention to the life partner!

Furthermore, it is crucial that in some cases the life partner of the owner of a sole proprietorship may also be financially at risk. In principle, there is no direct risk for a partner when he/she is not involved in the business. However, if the owner of the business is held personally liable for debts or obligations of the business, this can affect the personal assets/ estate assets of their marriage or registered partnership. Therefore, it may be wise for partners of sole proprietors to draw up prenuptial agreements that consider the scenario of problems arising in the sole proprietorship.  

Nevertheless, as said, the sole proprietorship is an immensely popular legal form in the Netherlands. This is due to it being seen as an “easy” legal form. There are no legal requirements regarding the minimum capital at incorporation or for, for example, auditing or filing annual accounts. Also – apart from the income tax paid by the owner on the profits from the business and remittance of VAT (Value Added Tax) – there is no separate tax liability for the business itself.

Is your sole proprietorship ready to evolve into a Dutch limited liability company/BV? Or do you want to start collaborating with other entrepreneurs?

Limited liability company (bv) (legal personality)

The BV, bv or B.V., or “private limited company,” is the most well-known legal form in the Netherlands. A bv is a legal form in which the assets of the company are separated from the private assets of the owners, the so-called ‘shareholders’. A bv is managed on a day-to-day basis by a board of directors, which – depending on how the bv’s articles of incorporation are structured – must seek permission for action from the shareholders.  

The establishment of a bv is often the first step toward further professionalization or expansion of a sole proprietorship and serves as a convenient tool for many large groups of companies to set up their corporate structure by using not only operationally activecompanies, but also, for example, holding companies. 

Whether a BV is an advantageous legal form for your organization depends on several components. Here are the advantages and disadvantages:


  • Limited liability: in a BV, the assets of the company are separated from the private assets of the shareholders, the owners.  
  • Professional image: a bv is considered a more professional/reliable legal form than a sole proprietorship or vof. This, while in practice, this does not have to be the case at all. Nevertheless, this branding argument is also an important aspect in the choice of many entrepreneurs to convert an already existing company into a BV;  
  • Tax advantages: with a BV there are tax advantages in the Netherlands, such as the ability to defer profits and benefit from special corporate tax rates. To set up the most optimal tax structure, it is advisable anyway for shareholders and directors of BVs to seek advice from a tax professional. Crowe Peak offers excellent services in this area.  


  • Formation costs: the formation costs of a BV are higher than for some other legal forms (see overview below). 
  • Annual costs: there are annual costs associated with having a BV, such as costs regarding corporate housekeeping and financial administration and hiring an accountant. 
  • Limited privacy: a BV must publish its financial statements annually with the Chamber of Commerce. This means entrepreneurs have less privacy if they own a bv.

Partnership (maatschap) (no legal personality)  

A partnership (maatschap) is a legal form/a form of cooperation without legal personality. The cooperating persons ‘partners’ (maten), jointly run the company, but each individually contribute knowledge, labor, money, or goods. They share in the profits or losses of the enterprise. An important feature of a partnership is that the partners are jointly responsible for the business’s debts and obligations. This means that the partners can be sued with their private assets in case of bankruptcy or debts. A partnership is easy to set up and has no minimum capital requirements. Also, no deed of incorporation is required, but a partnership contract can/should be drawn up that sets out agreements between the partners. The partnership contract also offers great flexibility, such as in respect of profit distribution. This may be a reason to choose for a partnership in the Netherlands, rather than a limited liability company (BV), for example.  

A partnership is particularly suitable for liberal professions – such as those of lawyers, doctors, and accountants – where the partners bring their own specialties and provide services jointly. This is also related to partners paying income tax on their share of the partnership’s profits.  There is no separate tax liability for the business.

General partnership (vof) (no legal personality)  

A general partnership, popularly known in the Netherlands as a “vof,” is also an unincorporated partnership in which different partners (vennoten) can bring different things into the business and then share the profits or losses from that business. Yet it differs from a partnership (maatschap) and a limited partnership (commanditaire vennootschap).  

A key feature of a VOF is that the partners are jointly responsible and liable for the debts and liabilities of the enterprise. This means that the partners can be addressed with their private assets in case of bankruptcy or debts. A VOF is particularly suitable for enterprises where the partners complement each other and can jointly provide a wider range of products or services. The partners pay income tax on their share of profits from the VOF individually, and there is no separate tax liability for the company itself.  

A VOF is established by contract, which also provides flexibility, such as a possibility for profit sharing. This can be a reason to choose a VOF, rather than a limited liability company (BV), for example.

Limited partnership (commanditaire vennootschap) (no legal personality)

Whereas in the partnership and in the vof the partners usually operate on the basis of equality, there are also legal forms in which there is cooperation, but from different positions. In the Netherlands, the main legal form that facilitates such collaborations is the limited partnership (commanditaire vennootschap or CV).  

A limited partnership is a partnership between two or more persons, with at least one being a so-called “general partner” (beherend vennoot) and (at least) one “limited partner” (stille vennoot). The managing partner is responsible for the day-to-day management of the business and is fully liable for the debts of the limited partnership. The silent partner contributes capital and has no control over the business operations, but also bears limited liability for the debts of the limited partnership.  

A limited partnership’s important feature is that the limited partner is not involved in the daily management of the business. In principle, he or she may not act on behalf of the limited partnership and usually has no authority to sign. This means that the limited partner cannot be held liable for the debts of the limited partnership unless he or she actively interferes in the management of the business.  

A limited partnership can be established by means of a notarial deed, in which agreements between the partners are recorded. These may include agreements on the contribution of capital and labor, the distribution of profits and losses and decision-making within the limited partnership. A limited partnership is particularly suitable for entrepreneurs looking for a form of cooperation in which one or more limited partners contribute capital, but do not play an active role in the management of the business. An advantage here is therefore also that the limited partner has limited liability, which is not easily possible with an ordinary partnership and VOF.

Association (vereniging) (legal personality)

A lot of people living in the Netherlands associate the term vereniging, association, with their spare time. They are for example members of a tennis vereniging, a bridge vereniging or an ice skating vereniging.  From a legal point of view, those associations are usually also set up as an association (vereniging). A characteristic of an association is that it is formed with a common goal of people, who do not seek monetary gain from that goal, in mind. Therefore, the association also inherently is a non-profit organization. This also allows for the fact that the people behind the association, the “members,” are in principle not liable for the debts of the association. A further advantage of the association is that members retain much independence but have a say in policy.  

Associations are established through bylaws (statuten). These include agreements on the organization’s purpose, the decision-making method, members’ dues, and the board’s appointment. This board oversees day-to-day management and represents the association in the outside world. The members in turn have control within the association (just as shareholders have in a bv or nv) and decide, among other things, on the appointment of the board, and the approval of the budget.

Foundation (stichting) (legal personality)

Besides the association, many people in the Netherlands are particularly familiar with the “foundation” (stichting). A foundation is often established to build an organization that pursues a particular goal, such as promoting culture or nature conservation, supporting charities, or managing (a) fortune. Unlike an association, a foundation has no members, but does have a board of directors.  

Foundations are established through a notarial deed, in which the purpose is laid down. Here it is important to note that a foundation has no “owners” or “shareholders”. This is an important advantage of the foundation: The foundation usually has an independent position from its stakeholders. The board itself determines the policy of the foundation. However, the foundation can be set up in such a way that the board also includes representatives of the stakeholders. For example, an “advisory board” may also be established to ensure that stakeholders still have some say in the policy.  

In that context, it also makes sense for a foundation to have legal personality. Moreover, a foundation cannot simply be dissolved. The board of the foundation has the task of realizing the purpose of the foundation and can manage and use funds and other resources for that purpose. The board can only be held liable in exceptional cases for debts of the foundation.

Cooperative (coöperatie) (legal personality)

When you say cooperative, many people in the Netherlands think: Rabobank. This major bank is the best-known cooperative (coöperatie) in the country. Because of this Rabobank does not have shareholders, but members. Reason being a cooperative is a legal form in which members jointly own the business being conducted and in which the members jointly decide on the policies needed to do so. In other words, a cooperative involves several individuals or companies working together to achieve joint benefit. This legal form is characterized by a democratic structure. The members are not personally liable for the debts of the cooperative. They can only be so if they have committed themselves to this separately, for example through a surety agreement (borgstelling). Thus, the cooperative is like the association: The members retain their independence.  

The cooperative is widely used for a specific purpose shared by the members. Examples include purchasing goods, providing services, or investing in a project. In addition to the fact that many people like the fact that the cooperative promotes a cooperative form of cooperation, choosing a cooperative can also have tax advantages. One example is that cooperatives have a corporate tax exemption.

Want to know more about the tax advantages of cooperatives? Or would you like our tax experts to take a critical look at your tax and/or corporate structure? Contact us directly for a personal consultation.

Mutual insurance company (onderlinge waarborgmaatschappij) (legal personality)

A specific form of cooperative is a mutual insurance company (onderlinge waarborgmaatschappij). This is a cooperative in which members jointly bear financial risks. The main task is thus to provide insurance to members. The difference with a commercial insurer is that a mutual insurance company is not aimed at making a profit, but purely at meeting the needs of its members.  

A mutual insurance company thus also operates based on mutual trust and tries to keep the cost of insurance as low as possible. Members of mutual insurance companies have a say in the company’s decision-making process and often receive a portion of the profits in the form of a dividend or discount on their premiums. A good example of mutual insurance companies in the Netherlands are private disability plans for the self-employed.

Limited liability company (nv) (legal personality)

The NV is, in a sense, the superlative of the bv, as the shares in a nv are not held by a closed group of shareholders, but by an open group of shareholders. The share capital is divided among a certain group of shareholders who can then freely trade those shares. Like a bv, a nv has legal personality.  

An NV is managed by a management board (board of directors) and controlled by a supervisory board. Shareholders usually do not have direct control over the company’s policies, but they can exercise influence through the general meeting of shareholders.  

The main difference between a Dutch NV and a BV is thus in the control and liability of the owners. In an NV, the shareholders own the company, but have only a limited say in operational matters, whereas in a BV the “director-major shareholder” (DGA) is often the sole shareholder and thus has complete control. In addition, shareholders can never be held liable for debts of the company, whereas in a BV construction this often has a chance to succeed via an appeal to director’s liability. This only applies if a shareholder is also a director of the bv.

Legal form or form of cooperation?

Consortium (consortium)

An odd duck in the world of legal forms is the ‘consortium’. Although the consortium is often mentioned in the same breath with legal forms consisting of collaborations of entrepreneurs, a consortium is not officially a legal form, but a collaboration between two or more companies or organizations. A consortium’s purpose is to carry out a joint project in which participants complement each other in knowledge, expertise and resources. The participants often have different expertise, so it is not obvious that they will cooperate beyond what is necessary for the project.  

A cooperation within a consortium is not laid down in (notarial) statutes, but in a consortium agreement in which agreements are made about, for example, the division of costs and revenues, division of responsibilities and liability and the duration of the cooperation.

Consortiums have no legal personality  

Since a consortium is thus not a stand-alone legal form and therefore does not have legal personality, it is important to realize that, in principle, participants in a consortium are all responsible for carrying out their part of the assignment and fulfilling their obligations. However, when you as a third party enter into an agreement with a consortium, you can often hold the various underlying parties jointly and severally liable if one of the parties within the consortium fails to fulfill its agreements. This is often contractually defined as a requirement of the consortium’s client. There may also be a layered structure: the “consortium leader” is liable, and internally to the consortium leader the responsible partner is liable for those damages. A consortium agreement often includes agreements on lines of communication: Which individuals interact with each other on specific project matters?  

A consortium agreement often also contains agreements on how to handle claims from parties other than the principal. Revenue sharing and the use of each other’s knowledge and intellectual property may also be regulated in the consortium agreement. If these matters must remain confidential, a separate agreement can be drawn up between the members on the one hand, and between the consortium and the client on the other.’  

A consortium agreement has unparalleled flexibility. On the other hand, in complex projects, it can be difficult to write down all the key topics properly, and in a way that accommodates all scenarios.  

In long-term cooperation, therefore, a joint venture can also offer a solution. A joint venture has the advantage of using partly the familiar structure of a legal entity such as a BV, and partly contractual agreements.

Joint venture (joint venture) 

Another form of cooperation that can look suspiciously like a separate legal form to third parties is a joint venture. In the Netherlands, a joint venture is often formed with the same type of goals as a consortium. Like the consortium, a joint venture also has a contractual basis and no separate legal personality. Unlike a consortium, however, a joint venture often does involve the establishment of a new legal entity (with legal personality) that will carry out the task at hand on behalf of the cooperating parties. Also, a joint venture construction assumes more of a “joint” approach and sharing of issues such as costs, hiring of personnel, procurement, and planning, whereas in a consortium agreement it is often more of an “every man for himself” approach, with only a common goal in mind.  

Do you have a collaboration with several companies in mind and are you curious which form of collaboration is the most suitable and poses the least risk for your company? Crowe Peak is happy to offer tailored advice in this area. Outline your situation here, and we will get in touch.

New law regarding the modernization of partnerships

Currently, under Dutch law, there are still (limited) differences between a partnership and a vof and significant differences between these two legal forms and the cv (see above). These distinctions will fade when the Law on Modernization of Partnerships (Wet modernisering personenvennootschappen) is introduced. This (proposed) new law should make it simpler for entrepreneurs to start a business together. Under the new law, the number of partnerships will be reduced from three forms (partnership, vof, cv) to two (company and cv). This means that the vof and the partnership will effectively disappear. Among other things, this affects the liability of partners based on professional and business activities.  

Legal personality for CV and partnership

Another especially important change that will go into effect with the Modernization of Partnerships Act is that the CV and the partnership can also acquire legal personality. This will also make it easier for partners to join and leave the company and to transfer it. The company will no longer be fully driven by the partners/partners. The new law is thus also expected to provide more security for both creditors and partners.  

As far as the limited partnership is concerned, an important imminent change is that the limited (silent) partner will, according to the draft law after implementation, also be allowed to perform actions for the limited partnership in public. He can then do this based on a power of attorney, without becoming jointly liable for any debt arising from his actions. This will make operating within a limited partnership more flexible, without actively disadvantaging creditors.  

The effective date of the Modernization of Partnerships Act (Wmp) is not yet known. The so-called “internet consultation” is currently being evaluated. Crowe Peak is keeping a close eye on all developments and will inform you of any relevant news. Do not miss anything. Subscribe to our newsletter. 

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Legal forms: from partnership to public limited company, an overview

Legal formOwnerLegal personalitySeed capital required?
EenmanszaakThe person behind the businessNoNo
MaatschapPartnersNot yetNo
VOFPartnersNot yetNo
CVManagement company and silent partnershipNot yetNo
BVShareholdersYesNo longer mandatory
NVShareholdersYesMinimum EUR 45,000

Please note that some of these legal forms also require registration in the UBO register. Whether this applies to your (intended) legal form depents on your situation.

Similar legal forms in different countries 

When you do a lot of business across borders, you would like to know who you are dealing with. Below is an overview of the names of similar legal forms as in the Netherlands in the main economies in which Dutch entrepreneurs do business. It is important to note here that countries – even within the EU (European Union) – draw up corporate law rules independently of each other. This means that the rules regarding legal forms can also differ (enormously) from country to country. If you encounter problems with or have questions about a foreign business partner, investor, creditor, or debtor, it is always wise to seek professional advice. At Crowe Peak, with our international network spread over more than 150 countries, we are at home in many different jurisdictions. This makes us your ideal partner for legal matters abroad. Contact us or subscribe to our newsletter. 

CountryEenmanszaak  BV NV Stichting 
Germany Einzelunternehmen GmbH Aktiengesellschaft Gründung 
BelgiumEenmanszaak BV NV Stichting, VZW of IVZW 
UKSole trader LLP PLC Foundation, CIC of CIO  
USSole Proprietorship PLC LLC Trust/non profit corporation 
FranceEnterprise individuelle  S.A.R.L. SA Fondation 
ItalyImprese individuali S.P. S.L. Fondazione 
SpainEmpresa individual S.L. S.A.  Fundación 

Choice of legal form and bankruptcy

As the above shows, there is a lot of choices to make when it comes to legal forms. But apart from the money needed to establish certain legal forms, are those choices relevant now? The answer to that question is “yes.” And more so when bankruptcy is involved. Indeed, that is the moment when the choice of a particular legal form can start to take its toll on an entrepreneur.  

In the Netherlands, choosing a particular legal form can have major consequences in bankruptcy. With a sole proprietorship, partnership, VOF or CV, there is no distinction between the assets of the company and the private assets of the owner(s), which means that in the event of the company’s bankruptcy, the private assets of the owner(s) may also be at risk.  

In contrast, in the case of a limited liability company (bv or nv) there is a separate asset: the assets of the company are separate from the private assets of the owners. This is different only if they are personally committed to those debts in some way, for example, in the case of a bank loan or other financing. It may also be the case that the directors of a PLC/BV or an SA are held personally liable in cases of, for example, mismanagement or withholding information. This also applies to directors of cooperatives, associations, foundations, and incorporated partnerships.

Choice of legal form and financing

Another important pillar to keep in mind when weighing up a choice for a particular legal form is the possible impact on the possibility of financing.  

For example, a sole proprietorship and a partnership are easy to set up, but the owner(s) are personally liable for the company’s debts. This can make it more difficult to attract financing: With a VOF, an investor faces more risk than he faces as a shareholder in a bv. And a financier investing in a sole proprietorship may face additional risk if an entrepreneur makes unwise financial decisions in private. From this perspective, a partnership and a bv offer more security for the financier, also because a partnership or bv in themselves have greater continuity than a vof and sole proprietorship. Another factor is the perception that a bv is often seen as a more professional and transparent legal form, with clear rules and responsibilities for directors and shareholders.  

The choice of legal form can also affect the ability to raise external capital. For example, a BV can issue shares, making it possible to raise capital from new investors. An association or foundation can apply for grants and receive donations.  

Tax consequences

Finally, the tax treatment of the legal form can also affect financing opportunities. For example, specific rules apply to the tax treatment of profit distributions to partners or shareholders. It is therefore important to consider not only the legal aspects but also the financial implications when choosing a legal form. Would you like to know more about the implications of a choice of law for the possibility of financing? Or are you (re)financing your company or certain operations and wish to spar about the legal consequences of attracting outside capital? Is security required of your organization of which you cannot yet foresee the consequences? The lawyers at Crowe Peak are happy to help you. Feel free to contact us.  

Legal forms and company structure

So, there are many options regarding the choice of a particular legal form. The question that lands next for many more established entrepreneurs is: How do I best structure my various legal forms among themselves and in relation to each other? This is especially true when your company is composed of several private limited companies.  

There is much to say about the structure of PLCs/BVs, but at least this: An operating company in which you personally have a direct interest does not shield you privately from the risks, nor does it offer you the opportunity to secure capital from the operating company without having to pay taxes on it directly. Therefore, a holding company is always divided between the operating company and the shareholder. However, as the company grows, this may no longer be sufficient. Therefore, always seek professional advice in this area. Furthermore, the following points of attention also apply.

Splitting activities into different BVs 

If there are various activities within the company, it may be advisable to split these between several PLCs/BVs. This way, less successful activities do not affect the ones running better. Also, since the changed corporate income tax (Vpb) rates, it is sometimes fiscally profitable to split up companies.  

In 2021, the bracket limit of the low 15% VPT rate was increased by €45,000 to €245,000. Starting 2022, this limit was further increased to € 395,000. As of 2023, the low-rate limit was reduced from € 395,000 earnings to € 200,000. The low rate of 15% was increased to 19%. Companies with profits from € 200,000 onward will continue to pay the high rate of 25.8% as of January 1, 2023. In 2024, the Dutch government will look again at the low rate.  

Valuable assets in a separate company  

Does the company also own real estate? If so, it may be advisable to place this real estate in a separate PLC/BV in a strategic location in the structure. This makes the real estate safe if another company goes through a rough period. It also makes parts of the company easier to sell because the real estate does not have to be sold immediately along with it.  

This does not just apply to real estate. You can also secure valuable machinery or any patents by separating them from the active operating companies where the entrepreneurial risk lies. 

Group financing  

If the company has a lot of assets but at the same time a lot of working capital is needed in the group, it may be advisable to set up a management company that manages the assets and provides the active operating companies with working capital if necessary. The advantage of this is that the group is financed with its own funds, each operating company does not have to apply separately for financing from the bank and, if possible, the interest income also benefits the group again.  

As already indicated, there is no general optimal structure. Which structure suits your company depends on the organization’s own wishes, its vision for the future, the company’s area of expertise and the associated (legal) risks.  

Would you like to know what the optimal legal structure is for your enterprise? Or would you like to check whether the current structure is still appropriate? Then contact our advisors for more information.  

Want to know more?

Are you starting a business on your own or with others? Are you interested in setting up a VOF, a partnership, a CV, and BV, a foundation, association, cooperative or an STAK? Crowe Peak’s specialists are happy to help you find the best legal form for your (proposed) company. We also have extensive experience in advising on corporate structuring, restructuring and company takeovers. We work together with a talented team of specialized tax specialists and accountants. Discover what Crowe Peak can do for you? Get in touch!

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