Closing an inactive legal entity

Published by:
Netherlands Chamber of Commerce, KVK
Netherlands Chamber of Commerce, KVK

The Netherlands Chamber of Commerce KVK can close legal entities that it considers to be inactive and not operational. In Dutch the term ‘empty’ (leeg) is used. For example, if a director has recently passed away. This page explains the reasons for closing an inactive legal entity and describes the procedure. And what you can do if you disagree with the dissolution.

When is closure mandatory?

Legal entities need to be dissolved (ontbinden) before they can be closed. In some situations, KVK is required to dissolve legal entities that are listed in the Business Register. This happens under at least two of the following criteria:

  • The legal entity has no registered director, or no director was registered in the past year. The director has passed away. KVK has been unable to reach the director at the address in the Business Register or the civil registry for at least 1 year.
  • The legal entity has not disclosed any financial statements for at least 1 year. This does not apply to associations (vereningen) and foundations (stichtingen).
  • The legal entity has not filed a corporate income tax return for at least 1 year. This does not apply to vereningen and stichtingen.
  • The legal entity cannot be reached at the address listed in the Business Register and has not provided a new address.

When the KVK determines that a legal entity has to be dissolved and closed, it will send a letter to the legal entity and its registered directors. The letter explains the reasons for dissolving the legal entity. Reasons for dissolving a business are also called ‘grounds for dissolution’ (ontbindingsgrond). You have 8 weeks to resolve the reasons for dissolving and closing the legal entity.

Resolving grounds for dissolution

KVK will send you a letter stating its reasons for closing the legal entity. The letter will also explain how you can prevent KVK from doing so. For example, by registering a director or providing a correct address. If one or more of the grounds for dissolution are left after 8 weeks, KVK will dissolve and close the legal entity.

Order of Dissolution and publication

It takes a so-called ‘Order of Dissolution’ (ontbindingsbeschikking) to dissolve a legal entity. KVK announces this decision to the directors and the legal entity. The Order of Dissolution is published in the Business Register (in Dutch) and in the Government Gazette (Staatscourant, in Dutch).

Objecting to dissolution

Owners or directors who disagree with the dissolution of their legal entity can object in writing to KVK. You must do this within 6 weeks. KVK determines whether the objection is grounded and whether to reverse the dissolution. If the KVK decides that the objection is not grounded, you can also appeal this decision. You can send your appeal to the Trade and Industry Appeals Tribunal (College van Beroep voor het Bedrijfsleven, in Dutch) in the Hague.

Difference with and deregistration

If your legal entity is no longer active, KVK may also deregister your business from the Business Register. KVK compares the Business Register with data provided by the Tax Administration to determine whether this is the case. This process is called deregistration or automatic decommitment (ambtshalve doorhaling). Deregistration can only happen after dissolution of the legal entity.

Deregistration does not only concern businesses with a legal personality. For example, eenmanszaken (sole proprietorships) and maatschappen (professional partnerships) can also be deregistered by the KVK. The process of deregistering a company is not the same as dissolving an inactive legal entity.

If KVK determines that your business without legal personality is no longer active, they will send you a letter. If you fail to reply to the letter, KVK will deregister your business after 4 weeks.

Questions relating to this article?

Please contact the Netherlands Chamber of Commerce, KVK