Dissolution of a legal entity

Dissolution by decision

In most cases, a formal decision is required to dissolve a legal entity. Who is allowed to make that decision depends on the type of legal entity.

• Public or private limited company (nv or bv): the general shareholders' meeting takes the decision.
• Association (vereniging), cooperative (coöperatie) or mutual insurance company (onderlinge waarborgmaatschappij): the members' meeting takes the decision.
• Foundation (stichting): the board takes the decision.

The dissolution of a legal entity takes effect the moment you make this decision, or at a future time. It cannot take effect before you officially make this decision.

Dissolution due to lack of members or by a provision in the articles of association

In some cases, no decision is required to dissolve an association, cooperative or mutual insurance company. These must be dissolved immediately if they no longer have members. In other cases, the articles of association state that the legal entity must be dissolved in the event of a specific event. For example, if the purpose of a foundation has been achieved. Indicate that your legal entity has been dissolved using form 17a (pdf), which you can download from the KVK website.

Termination of the legal entity

The dissolution of a legal entity precedes the termination. A dissolved legal entity does not immediately cease to exist, unless there is no capital at the time of dissolution. Is there any capital? In that case, debts and benefits must be paid first. This is called liquidation. The legal entity continues to exist until the capital has been liquidated. If the legal entity has ceased to exist and it turns out afterwards that there are still creditors and/or assets, the liquidation can be reopened. In that case, the legal entity revives (but remains dissolved) to complete the liquidation. Stakeholders can request the court to reopen the liquidation. You do not have to go to the notary for dissolution and termination. Take tax settlement into account when you end your business, and the legal entity ceases to exist.

Liquidators

The directors of the dissolved company liquidate the assets of the legal entity. The articles of association may state that other persons are also liquidators. If there is no liquidator, the court appoints one. This is done at the request of a stakeholder or at the request of the Public Prosecution Service (Openbaar Ministerie). If there is still capital left after paying all debts, the liquidator will pay this to any shareholders or beneficiaries (unless the articles of association say otherwise). For more information about liquidators, read the factsheet on 'Dissolution of legal entities'.

New turbo liquidation regulations

To prevent the abuse of shell legal entities, new regulations are being proposed. Once the amendment is accepted, creditors will have more rights during turbo liquidations. Companies will have to prove that a turbo liquidation was necessary. The board of an organisation is obliged to draw up a closing balance sheet. It is not yet known when this amendment will take effect.

Dissolution of empty legal entities by KVK

Under certain conditions, the Netherlands Chamber of Commerce KVK must dissolve empty legal entities.

Partnerships

Different rules apply to the termination of partnerships such as a general partnership (vof), professional partnership (maatschap) or limited partnership (cv). Partnerships are not legal entities, but you do have to dissolve them before you can deregister them at KVK. The most common way to do so is to have all partners make a signed statement that they end their involvement in the partnership. Use form 17a (registering the dissolution of a partnership).

Ending a sole proprietorship

A sole proprietorship is not a legal entity. You do not have to dissolve it. Read what to do if you want to end your sole proprietorship.