Legal forms and liability
Liability is an important issue for businesses. It means that you have to pay for costs and damages if something goes wrong. The extent of your personal liability depends on the legal form of your business.
Personally liable or not
There are legal forms with and without legal personality. In a legal form without legal personality, the owner is personally liable for the debts of the business. In legal forms with legal personality, such as the bv or nv, the legal entity is liable.
Legal forms without legal personality
Eenmanszaak (sole proprietorship)
The owner of an eenmanszaak (sole proprietorship) is 100% personally liable. So, if you cause any damage, you pay the costs with your own money. If the business goes bankrupt, the owner goes bankrupt too. Are you married in community of property(gemeenschap van goederen)? Your partner will also be financially liable for debts incurred by the business. You may be able to avoid this by signing a prenuptial agreement.
VOF (general partnership)
In a vof, every partner is 100% personally liable for business debts, regardless of which partner incurred them.
CV (limited partnership)
The managing partner of a cv is 100% personally liable. Silent partners can only lose their contribution to the partnership.
Maatschap (professional partnership)
In a maatschap, every partner is usually liable for an equal share. This depends on what was laid down in the partnerschip agreement.
Legal forms with legal personality
Bv, nv, vereniging (association), and stichting (foundation)
In a bv (private limited company), nv, (public limited company) vereniging, or stichting, liability lies with the legal entity itself. So with the bv, nv, association or foundation. Not with the director who signs agreements on behalf of the legal entity. However, there are exceptions to this that could still expose you to personal liability.
Vereniging van Eigenaars, (VvE, Owners’ Association)
In a VvE, the legal entity is liable. But in the event of money shortage, members are liable in proportion to their share in the VvE.
Coöperatie (cooperative) and onderlinge waarborgmaatschappij (mutual insurance society)
In a coöperatie or ‘onderlinge waarborgmaatschappij’, the letters used in the acronym of the Dutch name, tell you who is liable:
- WA (Wettelijke Aansprakelijkheid, meaning civil liability among members),
- BA (Beperkte Aansprakelijkheid, meaning limited liability among members),
- UA (Uitgesloten Aansprakelijkheid, meaning excluded liability among members).
Questions relating to this article?
Please contact theNetherlands Chamber of Commerce, KVK