Changing the legal structure of your company starts with choosing a new one. You must inform the Netherlands Chamber of Commerce and the Tax Administration of this change. In some cases you also have to notify a civil-law notary of the new legal form. And sometimes you have to calculate the discontinuation profit for the tax authorities.
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Changing your business structureChanging the legal structure of your company starts with choosing a new one. You must inform the Netherlands Chamber of Commerce and the Tax Administration of this change. In some cases you also have to notify a civil-law notary of the new legal form. And sometimes you have to calculate the discontinuation profit for the tax authorities.
Why change your business structureWhen you started your business, you chose the structure that was best suited to your situation and ambitions. But when circumstances change, a different legal form may be a better fit. The main reasons to change are liability, taxes and working with partners. In business structures without a legal personality, the owners are all personally liable. And the tax rates and types of tax differ per business structure. Some examples:
- You are registered as a sole proprietor. After some years the business is expanding. More money is involved and therefore more risk. As a sole proprietor you are personally liable for the company’s finances and debts. Also, you pay income tax on your sole proprietorship's profits. Changing the legal form to a private limited company (BV) means the company is liable. And the bv corporate income tax rate (vennootschapsbelasting) is lower than the highest scale of income tax.
- You want to work together with others and be equal partners. You could change your legal form to a commercial partnership (VOF), or if it concerns a specific profession, to a professional partnership (maatschap).
- You can change a private limited company (BV) to a public limited company (NV) if you want to be able to attract more capital.
- Note: a sole proprietorship does not always have to change its legal form if circumstances change. For example if a second person becomes more involved in the business or even when you hire staff.
Tool for choosing a Dutch legal structure
When setting up a business, you need to choose a legal structure, such as a vof, a sole proprietorship or a bv. There are several considerations to take into account, such as taxes, liability and staff. Use the Tool for choosing a Dutch legal structure to find out which legal structure best suits your company.
State the legal form
You must notify the Netherlands Chamber of Commerce KVK of the new legal form of your company. You must also report the change to the Tax and Customs Administration. All business structures with a legal personality such as BV and NV must be recorded in a deed at a civil-law notary.
Tax and social security implicationsChanging your business structure can have tax consequences for you and your company. You may have to pay income tax over the discontinuation profit (in Dutch). It can also have consequences for social security. How is your pension arranged, or your disability insurance? For example, if you start a BV you will be an employee of that BV and covered by social insurance. Unless you have 50% or more of the votes at the shareholders' meeting (possibly together with your spouse). In this case you can take out insurance yourself.
- You pay a one-time KVK registration fee
- If you change to a business structure with legal personality, you pay notary fees. This varies per notary and could be anything between €500 and €1,000.
- In addition, your company is legally obliged to keep records. You can outsource this to a bookkeeper or accountant. The prices range from €600 and €1,800 per year per year.
What else you should knowA change in legal form can mean that:
- you have to adjust your private situation. For example, to properly arrange liability if you are married in community of goods and you do not want your partner to be liable.
- you must invest €45,000 to start a public limited company (NV).
- you may have to keep more records than before. For example, if you become an employer. Certain types of company also have to produce annual accounts and file them with KVK.
- you have to include your 'ultimate beneficial owner(s)' or UBOs in the UBO register. This applies to all business structures except the sole proprietorship.
- if you change the business structure to one with legal personality, such as BV, NV, you must draw up articles of association. You bring them with you to the notary.
If you need personal advice, contact the Netherlands Chamber of Commerce, KVK. They can talk you through the options.
Statistics: businesses by legal form
Number of business structures with and without corporate (legal) personality.