Reasons for closing your business

Your business is no longer turning a profit

If your business no longer makes a profit because, for example, sales are declining or the market is changing, you may choose to quit to avoid (larger) debts. Before you close your business, there are some formalities to deal with. You can do so personally or with the help of an adviser. Consider:

• repaying debts
• dismissing your staff
• setting taxes with the Dutch Tax Administration
• applying for benefits
• cancelling agreements

What you need to do varies by legal structure. Here is a step-by-step plan for ending your business per legal structure.

Your business has debts

If your business has debts that you can no longer pay, you may have to stop your business. For example, because you use the Debt Restructuring Scheme (WSNP) or declare bankruptcy.

You can apply for a suspension of payments or try to pay your debts through the WHOA Act to avoid forced closure. You can also pay your debts through the WHOA Act and close your business afterwards. Explore your options using the Debt flowchart on KVK.nl. In the flowchart, you will find tips for paying back short-term and long-term debts.

Closing your company for personal reasons

Some people decide to close their business for personal reasons, such as retirement or occupational disability. Others simply no longer feel like running the business or cannot find a successor. You can make arrangements for the following situations.

Retirement

When you reach the retirement age, you will receive the national old-age pension (AOW). You can choose to continue running your business at the same time. If you want to retire, you can close or sell the business.

Find out more about saving for a pension as a self-employed professional.

Emigration

Are you moving to another country? If so, you will need to arrange various things depending on your destination. Such as taxes, health insurance and professional recognition. You may also need certain documents to be made legally valid before you leave.

Find out more about the practicalities and formalities of emigration (in Dutch).

Disability

If you become ill or incapacitated for work, you will not receive sick pay like a salaried employee would. Only people who have taken out disability insurance will receive a monthly benefit from this insurance, should they need it.

Read more about taking out disability insurance.

Divorce or separation

The agreements you make before you get married are very important if you and your partner decide to get a divorce. If you made no prenuptial agreements or partnership agreements, you may have to sell the business.

Find out more in business owners and divorce (in Dutch).

Death

There are some things you can do now to ensure that your company is left in good shape after you pass away. Making the necessary arrangements now can make dealing with your business a lot easier for your surviving relatives. Read more about Preparing your company for succession and what your surviving relatives will have to do after you pass away.

You have a buyer for your business

Once you find a buyer for your business, you can draft a sales memorandum. This document states what your business is worth, as well as other details. You are required to provide this information to the buyer. To make sure that this information stays between you and the buyer, you can have the buyer sign a confidentiality statement (or non-disclosure agreement, NDA). After the business has been sold, notify KVK and the Tax Administration that you have left the business.

Find out more about the practicalities and formalities of selling your business.

Video Ending your business

The KVK video ‘ending your business’ outlines various ways in which you can leave your business. The specific steps you will have to take will depend on your situation. There is a lot you have to do and it pays to be prepared.