You can turn your sole proprietorship (eenmanszaak) into a private limited company (bv). Reasons for doing this are: less personal liability, tax benefits, spreading risks, or making it easier to sell the company. The big difference is that after the conversion it is not you as a person but the bv itself that drives the business.
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3 ways to convert a sole proprietorship into a bvThere are 3 ways to convert a sole proprietorship into a bv. Your bv will receive a new Chamber of Commerce KVK number. Read below what to do for each way.
1.Asset-Liability transactionWith an asset-liability transaction you can quickly and easily convert your sole proprietorship into a bv. You sell all the assets and debts (liabilities) of the sole proprietorship to the newly established bv.
What do you have to do?You first set up the private limited company (bv) at the notary. The civil-law notary will then ensure that your bv is registered with the Chamber of Commerce KVK. You also need an asset-liability document. The asset-liability document states which assets and debts you are selling to the new bv. You can draw up this document yourself, or have a civil-law notary or an (online) commercial provider draw it up. When converting your sole proprietorship via an asset-liability transaction, you do not need a notarial deed. You also do not need to provide the document to the Tax Administration for approval. Because you end your sole proprietorship, you may have to deal with discontinuation profit.
2. Transfer of assets subject to taxDo you want to retroactively convert your company into a private limited company (bv) and sell it within 3 years? Then a transfer of assets subject to tax (ruisende inbreng) is the most suitable way.
What do you have to do?
You send a letter of intent to the Dutch Tax and Customs Administration. In the letter you let them know that you are converting your sole proprietorship to a private limited company, subject to tax. You draw up the letter of intent with an accountant or specialist. Then you set up the private limited company at the notary. The notary will draw up a deed of transfer. This contains all the assets and liabilities of your sole proprietorship that are transferred to the private limited company (bv). The notary then ensures the registration of the bv and deregistration of the sole proprietorship at KVK. The bv continues with the current book values on the balance sheet. Because you end your sole proprietorship, you may have to deal with discontinuation profit.