Step-by-step plan: Ending your professional partnership (maatschap)
If you decide to end your professional partnership (maatschap), you must dissolve the partnership. It is also important that you carefully examine the financial consequences. Check what you need to cancel, and settle your accounts with the Netherlands Tax Administration. Follow this step-by-step guide to end your professional partnership.
Check which agreements you have made with your partners. These may have been made verbally or in writing via a professional partnership agreement (maatschapscontract). This agreement includes agreements on the distribution of profits and on who is responsible for losses and debts when the professional partnership is dissolved. This means that the partners pay the debts and may receive their share back in cash or in kind, such as products.
In order to end your partnership, you must dissolve it. All partners must then give notice. Report the dissolution of your partnership to KVK with Form 17: 'Reporting a dissolution of a VOF, CV, maatschap, or rederij'. KVK immediately deregisters the maatschap from the Business Register.
KVK informs the Tax Administration that the partnership is terminated. The Tax Administration will send you a letter about the VAT and income tax consequences (see steps 7 and 8). Do you want to apply for unemployment benefits? Then wait a little longer before deregistering (see step 3).
Dissolution through a court
If the partners (maten) do not agree with dissolving of the partnership, you can go to court to have the partnership dissolved. This can only be done for important reasons, such as disturbed relationships and non-performance.
Dissolving a maatschap with outstanding debts
Are you forced to end your professional partnership because your company is in debt? Find out what your options are with the Debt Flowchart at kvk.nl. The flowchart gives you tips on how to deal with short-term and long-term debts. For temporary debts, you can first request a suspension of payment. If you are still unable to pay off your debts, you must file for bankruptcy.
When you end your professional partnership, you and your partners draw up a final balance. You can also have this done by a bookkeeper or accountant. The final balance is an overview of the assets of your maatschap. The capital must be settled (vereffening) and divided. So, always check the following:
Your professional partnership may no longer have any assets or business resources. Check which assets you still have, such as:
- accounts receivable
- money in the bank account
- inventory
- cars and machinery
- intellectual property rights
Get payments from debtors
Debtors are customers who have not yet paid your invoice. First send a payment reminder. If the customer still does not pay, follow the steps to get your customer to pay.
Does your professional 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 company van or machines? Check the duration of the contract. Contact the leasing company to find out what the options are.
After you have ended the maatschap, you remain liable for risks. For example, you still have to pay off your debts. So, make sure you arrange everything properly. Some insurers allow you to include risks when you stop working in your business liability insurance. This is called run-off risk.
Before you deregister the maatschap from the Business Register, consider what you need to cancel. For instance:
- phone numbers
- subscriptions
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 maatschap. If you were born after 1960, the benefit applies until the professional partnership ends. You can apply for the Bbz benefit at the social services of the municipality where you live.
In that case, you will receive a supplement to your income until the termination of your professional partnership. Apply for Bbz at your local council.
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.
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.
Do you have staff? Then you will have to deal with rules regarding dismissal. If you need to dismiss staff, you must apply for a dismissal permit from the Employee Insurance Agency UWV.Does the collective labour agreement (CAO) state that a social plan must be drawn up in the event of dismissal? For example, with agreements about a transition payment and assistance in finding new work. If so, you must also draw up and follow this plan. This way, the Netherlands Tax Administration will know that you no longer need to withhold payroll taxes and file returns for your staff. What you need to report is stated in “Chapter 17 End of withholding obligation or employment” of the Payroll Tax Manual (pdf, in Dutch).
Are you unable to pay your staff? Report inability to pay
If you are ending the maatschap due to financial problems, you may no longer be able to pay your staff. This is referred to as insolvency. You must report this to the Tax Administration. The UWV may then be able to take over part of your wage payments.
The Tax Administration will be notified by KVK that your professional partnership has been deregistered. You and your partners will then receive a letter stating that you must submit one final VAT return. Only after you have submitted your final VAT return will the Tax Administration send you definitive confirmation of your deregistration as a VAT entrepreneur.
Each partner must file a final income tax return. You will not receive a separate letter about this as you do for the last VAT return.
After ending your professional partnership, you must keep business records for at least 7 years. In some cases, the retention period is ten years. This depends on the type of data. You can find more information about retention periods at Netherlands Tax Administration (in Dutch). You may also scan the records to keep them digitally.