Dutch legal business structures

What issues should I consider in order to set up and develop a business?

What are the fundamental requirements that I will need to comply with in starting a business?

How can I choose the legal form or business structure for my company?

Are there any entities that can give support for starting a business?

How do I terminate/dissolve my company?

For various reasons  the time may come, or you may decide to stop with your business. You may  wish to close down or sell, or find yourself facing bankruptcy. It is also good to know what happens in case of your death, or succession within the family.

When closing down or selling you will need to settle your debts, follow the rules on dismissal if you have employees and you will have to file a final tax return.

  • As of 1 April 2017 debtors are granted a six month statutory grace period for paying back their debt. During that time creditors cannot claim any money or confiscate any goods. If you are no longer able to pay your debts and you have an Eenmanszaak or are partner in a partnership (maatschap or vennootschap), you are personally liable for your business’s debts. You can appeal to your municipality for debt restructuring. If this fails you can appeal to a court for debt restructuring. For more information: business.gov.nl/regulation/debt-restructuring/
  • If you have employees you are expected to follow dismissal procedures. There are various dismissal procedures that you should familiarize yourself with.
  • Finally, you will have to file a final tax return. Settling your tax obligations may vary depending on how/why the business is being terminated, whether it is closing down, being sold, or whether it is an issue of family succession or death or divorce.

Closing down

If you are closing down your business you need to report that to the Chamber of Commerce (KvK) which will pass on the information to the Belastingdienst (tax office). They will send you a written confirmation. In case you do not receive it, you need to inform them yourself.

You must also:

  • close the accounts of your discontinued business
  • file the annual reports and accounts up to and including the cessation date as soon as possible
  • make a final calculation and submit a final VAT return

You need to send in final tax returns for all relevant taxes, such as income tax, VAT or any other type of tax. If you have built up a retirement reserve, you need to settle that with your income tax. If you withdraw goods from your business for private use, you must pay VAT on these goods.

Selling your business

If you transfer your business (or a part of your business), you must calculate the discontinuation profit (stakingswinst) and pay income tax on that amount. As well as being relevant for income tax, wage tax and VAT purposes, selling  your business may also have capital gains tax consequences or affect social insurance benefits.

For further details visit the Dutch government website:

business.gov.nl/guides-for-doing-business/closing-down-a-business/guide-for-closing-down-a-business/

 If you are no longer able to pay off your debts, then another procedure applies:

Bankruptcy

You can petition the court to be declared bankrupt. You can do that for yourself or for the company you represent. You do not need a lawyer to submit the application to the court.

 If you have two or more creditors, they can file for your bankruptcy through a lawyer.

All your assets are seized in a bankruptcy. Depending on the legal form of your business, you may also be declared personally bankrupt.

If the court declares you or your company bankrupt, it will appoint an official receiver. That will be the only person allowed to administer your company from the day that you have been declared bankrupt. The receiver can sell your assets and divide the proceeds among your creditors. The receiver can decide whether you have to stop your work at once or at a later moment in time. The receiver can also give permission for certain activities you are allowed to do., for example, concern selling, concluding contracts or paying or collecting bills.

For further details visit the Dutch government website:

business.gov.nl/ending-your-business/bankruptcy/

What are the steps to start my own business in the Netherlands?