Most foundations are non-profit organisations. This means that the foundation is not a company and does not have profit as its goal. Non-profit organisations can take the first 4 steps to close down their foundation. If your foundation is a company, there are additional steps after step 4.
1. Let the board vote on the dissolution
The articles of association contain an agreement on the dissolution of the foundation. The board takes the decision to dissolve and proposes dissolution in the board meeting. If the foundation has a Supervisory Board (Raad van Toezicht, RvT), the RvT must first give its approval. Usually, the decision to dissolve can only be taken with a large majority of the votes in the meeting. That is usually two thirds of the votes. That means a minimum number of board members must be present. If you do not comply with the agreements in the articles of association, the outcome will not be valid.
2. Check the foundation's assets
Does (the majority of) the board agree with the dissolution? Check whether or not the foundation has any assets.
The foundation has no assets
Does the foundation no longer have any assets? Then the foundation ceases to exist, immediately after the dissolution decision has been taken. You must complete and submit the KVK form 17a (pdf) 'Dissolution of a company, legal entity, or partnership'. KVK will then deregister the foundation. This fast way of dissolving and deregistering is called a fast-track liquidation, or turbo liquidation.
Fast-track liquidation risk
There is a risk with fast-track liquidation. A creditor can demand payment through the courts if the foundation still has debts. This can lead to directors' liability.
The foundation still has assets
Does the foundation have assets? Then you must first settle the foundation's assets financially (liquidate). The board must appoint liquidators for this purpose. The liquidators check the outstanding invoices and the money in the bank account. Then they draw up a final balance. The foundation must transfer the assets and pay the debts. Is there still an amount left? Then usually the articles of association specify this must be spent on something that fits the purpose of the foundation.
Once the assets have been settled, the board will notify KVK of the dissolution using form 17a (pdf) ‘Dissolution of a company, legal entity, or partnership'. KVK will then deregister the foundation from the Business Register.
Appoint and report liquidators
Sometimes the articles of association state that the board itself is the liquidator. Or it says that the board must appoint 1 or more liquidators. Report the liquidators to KVK using form 17a (pdf) 'Dissolution of a company, legal entity, or partnership'.
The foundation is in debt
Do you have to end the foundation due to excessive debts? Then explore your options with the debt flowchart on KVK.nl. The flowchart provides tips for dealing with short-term and long-term debt. For temporary debts, you can first apply for a suspension of payment. If the foundation has debts with the Tax Administration, you must report that you are unable to pay (in Dutch). If any debts remain and cannot be paid, the foundation must file for bankruptcy.
3. Deregister the foundation from the Business Register
After the debts of the foundation have been paid or the assets have been divided, you can deregister the foundation. Use form 17b, ‘Termination of legal entity’. Print the form, sign it, and send it to your KVK regional office. Include a copy of a valid proof of identity from the signatory of the form. Once KVK has processed the form, the foundation is deregistered. You will receive a confirmation of this. Deregistration is free of charge and can only be done by post.
Consequences of deregistering
Closing down your foundation can have consequences for your bank account, financing, insurance, pension fund, and municipal permits. If you have been deregistered from KVK, you can no longer access your business bank account, for example. That can only be done through a judge. Which takes time and money. So, first check the website of such organisations. Check what the consequences are of deregistration from KVK before you deregister.
4. Keep your business records
After the dissolution of the foundation, you must keep your business records for at least 7 years. In some cases, the retention obligation is 10 years. This depends on the type of information. You can read more information about this in the step-by-step plan for keeping business records. You may scan the paper administration and store it digitally. The name of the custodian of the administration is stated in the articles of association. Or they state that the board must appoint the custodian. When the foundation is deregistered, you or a deputy must register the custodian in the Business Register.
Extra steps if your foundation is a company
If your foundation makes a profit or strives for a profit, then you are a company. Then you should also follow the next steps.
1.Lay off staff
Do you employ staff or volunteers? Then there are rules you must adhere to when ending your foundation. If you have to dismiss staff, you must apply for a dismissal permit. You must record agreements in a social plan, such as a transition payment and assistance in finding new work. Also report the dismissal to the Tax and Customs Administration. What you need to report is stated in ‘Stap 17 einde van inhoudingsplicht of dienstbetrekking’ (‘Step 17 end of withholding obligation or employment’) of the Payroll Taxes Handbook, (pdf in Dutch)
2. Inform your staff and customers
If you have staff or volunteers, tell them first that you are going to close your foundation. Your staff then has time to look for other work. Also check which contracts or agreements the foundation has with customers and suppliers. Only then let your customers and suppliers know that you are closing down. Read more about informing your customers on KVK.nl.
3. Submit your final VAT return
Once your foundation has been deregistered, you will receive a letter from the Tax and Customs Administration stating that you must submit a final VAT return (in Dutch). When you have submitted the last VAT return, the Tax and Customs Administration will send you the final confirmation of deregistration as an entrepreneur for VAT purposes.
Also file a declaration if you have not yet been deregistered
Deregistration sometimes takes a while. In the meantime, do you receive a message from the Tax and Customs Administration that you may have to submit a VAT return? Then you have to submit that return.
4. Pay corporate income tax (vpb)
The Tax and Customs Administration will send you a letter confirming the deregistration from the Business Register. And announcing that you have to settle your tax affairs. This is called tax settlement. You must file a last corporate income tax return.