If you decide to end your limited partnership, you must notify the Netherlands Chamber of Commerce KVK. First, you must dissolve the partnership. You will also have to settle with the Dutch Tax and Customs Administration. Keep your administration for at least 7 years. Read this checklist to find out how to end your limited partnership.
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The abbreviation cv stands for the Dutch legal structure commanditaire vennootschap. In English, this is called a limited partnership.
1. Check the agreements with your partners
Have you and your partners made oral or written agreements? If you have a partnership agreement, this includes agreements on the distribution of profits and liability for losses and debts when the cv is dissolved. Partners will need to pay part of the debts and may get their share back in cash or in kind (such as products).
Arrangements about disputes
The partnership agreement often states how you deal with disputes between you and your partners. If you have not made any agreements with your partners on this, you can still do so. For example, by asking for advice from an expert, such as an accountant.
2. Dissolving the cv
In order to cancel your partnership, you must dissolve it. There is no notice period. It is wise, however, to lay down the conditions of the dissolution in a contract and to have it signed by all partners.
Dissolving a cv with outstanding debts
Are you forced to end your commercial partnership because your company is in debt? Investigate whether you qualify for debt restructuring. For temporary debts, you can first request a postponement (suspension of payment).
3. Check the financial consequences
When you end your limited partnership, you and your partners draw up a final balance (or have it drawn up). This is a final overview of the assets of your cv. The capital must be settled (vereffening) and divided.
Also pay attention to the following points:
Transfer the assets in your limited partnership
Your cv can no longer have any assets. Divide the assets that your limited partnership has left, such as:
- outstanding invoices with debtors;
- money in the bank account;
- cars and machines;
- intellectual property rights.
Check which financiers you have to repay
Does your limited partnership have loans? Check what the agreements are. If you cannot fulfil your obligations, then contact the financier and try to find a solution.
Check which lease agreements you have
Do you have lease agreements? For example for a lease car? Check the duration of the contract. Contact the leasing company (lessor) to find out what the options are.
See if you are eligible for benefits
If you were born before 1960 and you own a business which is no longer viable, you can apply for a benefit via the Decree on Social Assistance to the Self-Employed (Besluit bijstandverlening zelfstandigen, Bbz). With the help of the Bbz you can receive benefits in addition to your income up to the level of a social welfare benefit. Please note: you must have spent at least 1225 hours per year on your cv. If you were born after 1960, the benefit applies until the limited partnership ends. You can apply for the Bbz benefit at the social services of the municipality where you live.
Are you aged between 55 and the state pension age? Then you may be eligible for the Older and Partially Disabled Self-Employed Income Support (IOAZ). With the IOAZ benefit, your income will be supplemented up to social welfare level. You must be able to demonstrate that you have too little income to live on. Apply for the IOAZ benefit at the municipality where you live.
Apply before deregistering from KVK
Please note: you must submit the application for Bbz and the IOAZ benefit before you deregister your limited partnership with KVK.
4. Inform your staff and customers
Do you have staff? Tell them in time that you are going to end your business. This way your staff can look for different work in the meantime.
Also check which contracts or agreements you have with customers and suppliers. Do this before you tell them you are ending your business.
5. Dismissing staff
There are rules that you must adhere to if you employ staff. If you need to dismiss staff, you must apply for a dismissal permit. You must also lay down agreements in a social plan, such as a transition payment and job counseling. Also notify the Dutch tax authorities of the dismissal.
6. Deregister your limited partnership from the Commercial Register
Deregister your cv from the Dutch Commercial Register. To deregister your limited partnership, you must first dissolve it (see step 2). The Netherlands Chamber of Commerce KVK informs the Dutch Tax and Customs Administration about the termination. You will receive a letter from the Dutch tax authorities about the consequences for income tax and VAT. Do you want to apply for a benefit? Do this before deregistering (see step 3).
7. Submit your final VAT return
After the Dutch Tax and Customs Administration has been informed that your limited partnership has been deregistered, all partners will receive a letter stating that you must submit a final VAT return.
8. Pay income tax
The Dutch Tax and Customs Administration will send you a letter confirming the deregistration from the Commercial Register and the tax settlement. Each partner must file a final income tax return.
Dealing with silent / limited partners
In addition to one or more managing partners, a cv also has one or more silent partners. The income of these silent partners is taxed as 'profit from business'. They are also eligible for investment schemes, arbitrary depreciation and investment allowance. Silent partners are not entitled to other entrepreneurial schemes. Read more about taxes for silent partners (in Dutch) on Belastingdienst.nl.
9. Check what to cancel
Make sure you cancel contracts and insurance policies of your cv. For instance:
Canceling your business bank account
Before you close your business bank account, take care of the following:
- Download all bank statements and/or the annual financial statement.
- Stop current debit agreements and periodic transfers.
- Cancel linked credit cards and insurance.
- Do you have a G-account? Contact the Dutch tax authorities to cancel it.
Ask your bank about the procedure for canceling a business bank account.
10. Keep your records
After ending your limited partnership, you must keep business records for at least 7 years. You may also scan the records to keep them digitally.