Good to know
The abbreviation vof stands for the Dutch legal structure vennootschap onder firma. In English, this is called a general partnership or a commercial 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 vof 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 vof
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 vof with outstanding debts
Are you forced to end your general 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 general 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 vof. The capital must be settled (vereffening) and divided.
Also pay attention to the following points:
All stocks and company assets will be transferred to the private assets of the partners when the vof is ended. This also applies to company cars. If you have deducted VAT when purchasing these assets, you must now pay VAT on them. The amount of VAT is based on the value of the goods at the time you are starting to use them privately. It is part of the final VAT return (see step 6).
Transfer the vehicle registration number to your own name
Do you have a vehicle registered in the name of your general partnership? Do not forget to transfer the registration number to your own name when you deregister your company. Read on RDW.nl what you must do (in Dutch).
Does your general partnership have loans? Check what the agreements are. If you cannot fulfil your obligations, then contact the financier and try to find a solution.
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.
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 vof. If you were born after 1960, the benefit applies until the commercial 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 general 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 general partnership from the Business Register
Deregister your vof from the Dutch Business Register. To deregister your general 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 general 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 Business Register and the tax settlement. Each partner must file a final income tax return.
9. Check what to cancel
Make sure you cancel contracts and insurance policies of your vof. 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 general partnership, you must keep business records for at least 7 years. You may also scan the records to keep them digitally.