Liability depends on legal structure
Your partner's liability depends on your legal business structure. There are legal structures with and without legal personality.
Legal structures with legal personality (legal entities)
In this case, you and your partner are not personally liable for business debts.
- besloten vennootschap bv (private limited company)
- naamloze vennootschap (public limited company)
- coöperatie (cooperative) or onderlinge waarborgmaatschappij (mutual insurance society)
- stichting (foundation)
- vereniging (association)
There are exceptions. For example, if you mismanage the company and this can be proven, you are personally liable.
Legal structures without legal personality
Here there is no distinction between your private and business assets. Debtors can make a claim on your private assets if you fail to pay business debts. And on your partner's private assets, unless you have made arrangements to prevent it.
- eenmanszaak (sole proprietorship)
- maatschap (professional partnership)
- commanditaire vennootschap (limited partnership)
- vennootschap onder firma, vof (general partnership)
No protection for a husband-and-wife business
If you and your husband or wife run a vof together, you are in a so-called man-vrouwfirma (husband-and-wife business). You are then both personally liable for business debts with your private assets. Taking out a prenuptial agreement does not offer protection against this. The man-vrouwfirma is a variety of the vof, not a separate legal structure. This variety applies to all couples (married or registered partners). Their sex makes no difference.
Liability depends on marital status
There are 3 ways to legalise your relationship. Your partner's liability depends on your marital status.
Do you live together? Your assets and debts are separated. You can choose to share both, as long as your business is doing well. And if your business goes downhill, you can decide to keep your assets separate.
Marriage or registered partnership with community of property
If you marry or register your partnership with community of property, you share everything. That means that your partner's assets can be claimed. Is your business performing very poorly? You risk losing not only your business, but also your and your partner's private assets.
Married after 2018: limited community of property
If you got married before 1 January 2018 without a prenuptial agreement, you are married with community of property. You share all the assets and debts you acquire during the marriage, but also all the assets and debts you had before you got married.
Did you get married after 1 January 2018 without a prenuptial agreement? Then limited community of property applies. This means that everything you acquire from the moment you are married, belongs to the community. Everything you had before you were married remains your personal property. This includes your business, but may not include your business profits. Read more about the limited community of property.
Marriage or registered partnership with a prenuptial agreement or partnership contract
You can safeguard your partner from personal liability for business debts in your prenuptial agreement or partnership contract. These arrangements are registered in the court huwelijksgoederenregister (matrimonial property register). This register is public.
From community of property to a prenuptial agreement
You are married, or have a registered partnership with community of property. Then you decide to start a business. You can still draw up a prenuptial agreement or partnership contract. To do so, you enlist the services of a notary. The notary draws up a deed for the prenuptial agreement or partnership contract and a deed of distribution. That way, it is clear which possessions and debts belong to which partner.
From a prenuptial agreement to community of property
If you sell or end your business or retire, it may be a good idea to change your prenuptial agreement or partnership contract into community of property. That way, your heirs will pay less inheritance tax if you pass away.
Separate your private and business bank accounts
Keep a clear distinction between you and your partner's private assets and your business money affairs. Separate your private and business bank accounts. Also, there are certain costs that you cannot deduct from your tax assessment, unless you have paid them from a business bank account. Otherwise, the Tax Administration will not accept the deduction. For example, refuelling a business vehicle.
Asking your partner to co-sign a loan agreement — a good idea?
When you take out a loan, banks will often ask your partner to co-sign the agreement. Be aware that if your partner co-signs for a business loan, they are also personally liable for the repayments.