Ending your sole proprietorship

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

If you decide to end your sole proprietorship, you must notify the Netherlands Chamber of Commerce KVK. You will also have to settle with the Netherlands Tax Administration. Make sure you pay outstanding debts and find out what the consequences are for your liability. Read this checklist to find out how to end your sole proprietorship.

Good to know

In the Netherlands, a sole proprietorship or sole tradership is called an eenmanszaak. Many so-called zzp'ers choose this legal structure.

1. Check the financial consequences

When you end your sole proprietorship, you have to deal with several financial matters. Pay attention to the following points:

All stocks and company assets are transferred to your private assets when you stop. This also applies to, for example, your company car. You as an entrepreneur supply these assets to yourself as a private person. If you deducted VAT when you purchased the 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 5).

Transfer the vehicle registration number to your own name

Do you have a vehicle registered in the name of your sole proprietorship? 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.

Does your sole proprietorship have loans? Check what the agreements are. If you cannot fulfil your obligations, then contact the lender and try to find a solution.

Do you have a lease car or other lease agreements? Check the duration of the contract. Contact the leasing company (lessor) to find out what the options are.

After you end your sole proprietorship, you remain liable for risks. For example, you still have to pay off your debts. Therefore, make sure you handle everything properly. Some business insurers also cover risks that come with ending your business.

​​​​​​Make sure you cancel contracts and insurance policies of your sole proprietorship. For instance:

2. Find out what to do if you are in debt

Are you forced to end your sole proprietorship because your company is in debt? Investigate your options with the KVK Debt flowchart. It will give you tips on how to deal with short-term and long-term debts. For temporary debts, you can first request a postponement (suspension of payment). If you are still unable to pay your debts, you must file for bankruptcy.

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 1,225 hours per year on your business. If you were born after 1960, the benefit applies until the sole proprietorship 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.

4. Inform your staff and customers

Do you employ 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. After that, inform your customers and suppliers that you are ending your business. Read more about informing your customers on the KVK website.

5. Dismissing staff

There are rules that you must follow if you employ staff. If you need to dismiss staff, you must apply for a dismissal permit. You must also set out agreements in a social plan, such as a transition payment and help finding new work. Also notify the Tax Administration of the dismissal.

6. Deregister your sole proprietorship from the Business Register

Deregister (in Dutch) your sole proprietorship (eenmanszaak) from the KVK Business Register. Deregistration is free of charge.

  • find the business you want to deregister in the Business Register
  • choose ‘opheffen eenmanszaak’ (deregister sole proprietorship)
  • fill in the form

The Netherlands Chamber of Commerce KVK will inform the Tax Administration about the termination. You will receive a letter about the consequences for income tax and VAT. Do you want to apply for a benefit? Do this before deregistering (see step 1).

7. Submit your final VAT return

After the Tax Administration has been informed that your sole proprietorship has been deregistered, you will receive a letter stating that you must submit a final VAT return. Only after you have filed your last VAT return will the Belastingdienst send you a letter to confirm that you are no longer an entrepreneur for VAT purposes.

8. Pay income tax

The Tax Administration will send you a letter confirming the deregistration from the Business Register and the tax settlement. You must file a final income tax return.

9. Keep your records

After ending your sole proprietorship, you must keep business records for at least 7 years. You may also scan the records to keep them digitally.

10. Explore new possibilities

Ending your sole proprietorship does not have to be all bad. You can focus on a new direction and make new plans. For example, by finding other work. Read tips for making new plans on KVK.nl.

Questions relating to this article?

Please contact the Netherlands Chamber of Commerce, KVK