Ending your general partnership (vof)

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

If you decide to end your general partnership, you must notify the Netherlands Chamber of Commerce KVK. First, you must dissolve (ontbinden) the partnership. Keep your administration for at least 7 years. Read this checklist to find out how to end your general partnership.

1. Check the agreements with your partners

Have you and your partners made oral or written agreements? You may have done so orally or in writing via a partnership contract. If you have a partnership agreement, this includes agreements on the distribution of profits. And who is liable 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.

2. Check the financial consequences

When you end your general partnership, you and your partners draw up a final balance sheet. This is a final overview of the assets of your vof. The capital must be settled (vereffening) and divided.

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 includes 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 start to use them privately. It is part of the final VAT return (see step 8).

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 to find out what the options are.

After you have ended the vof, you remain liable for risks. For example, you still have to pay off your debts. So, make sure you handle everything properly. Some insurers allow you to include discontinuation risks in business liability insurance. This is called run-off risk (uitlooprisico) and is the risk of claims after you have ended the business.

If a car is registered to the company, the registration of the car needs to be transferred to another company or to a person. It can not be registered to the company any longer when the company is deregistered from the Dutch Business Register. Read more.

3. 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 vof.

If you were born after 1960, the benefit applies until the general 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 (Formerly Self-Employed) Persons Income Support Act (Wet inkomensvoorziening oudere en gedeeltelijk arbeidsongeschikte gewezen zelfstandigen, 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. When dismissing staff, you need to apply for a dismissal permit (ontslagvergunning) for economic reasons. In a social plan, you should lay down agreements, such as a transition payment and help in finding new work. You will also have to inform the Tax Administration of the dismissal. Step 17 of the Payroll Taxes Manual (Handboek Loonheffingen, pdf, in Dutch) describes what you have to report.

6. Dissolving the vof

In order to end and deregister your partnership, you must first dissolve it. All partners must then give notice. 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. Report the dissolution of your vof to KVK with form 17a 'Dissolving a vof, cv, or maatschap'.

Dissolution through a court

If the partners do not agree about dissolving the vof, you can apply to the court to have the vof dissolved. This can only be done for important reasons such as disturbed relationships and non-performance of a partner.

Dissolving a vof with outstanding debts

Are you forced to end your general partnership because your company is in debt? Investigate what your options are with the Debt Flowchart on KVK.nl. The flowchart gives you tips on how to get rid of short-term and long-term debts. For temporary debts, you can first apply for a suspension of payment. Do any debts remain that you cannot pay? Then you must file for bankruptcy.

7. Deregister your vof from the Business Register

Deregister your vof from the Dutch Business Register. To deregister your vof, you must first dissolve it (see step 6). The Netherlands Chamber of Commerce KVK informs the Netherlands Tax Administration about the termination. You will receive a letter from the Tax Administration about the consequences for income tax and VAT. Do you want to apply for an unemployment benefit (uitkering)? Do this before deregistering (see step 3).

8. Submit your final VAT return

After the Netherlands Tax 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. Only once you have filed your last VAT return will the Tax Administration send you final confirmation of deregistration as a VAT entrepreneur.

9. Pay final income tax

The Tax 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.

10. Keep your records

After ending your general partnership, you must keep business records for at least 7 years. This depends on the type of data. You may also scan the records to keep them digitally.

Questions relating to this article?

Please contact the Netherlands Chamber of Commerce, KVK