A public limited company (nv) generates capital by issueing shares. The shareholders may participate in the decision-making process of your company. You need € 45,000 starting capital in order to register a NV. Find out what else is required if you want to set up a public limited company.
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What is a public limited company?
A public limited company, or in Dutch a naamloze venootschap (NV), is a company with legal personality. The main difference between a BV and an NV is usually the size: an NV tends to be a larger company, with several directors.
The capital of an NV is divided into shares, which are held by the shareholders. The ultimate power lies with these shareholders. They are allowed to make decisions about the company. They may also appoint and dismiss the board.
The directors are responisble for the daily management of the company. An NV often has a supervisory board, which monitores the management (two-tier board). In other cases, the supervisors are part of the board (one-tier board). NVs that trade on the stock market have to follow the Corporate Governance Code, which describes how the management and supervisory board of the company have to inform their shareholders.
As of 1 January 2020, both legal structures are only allowed to issue registered shares. NVs will no longer be allowed to issue bearer shares. Owners of bearer shares can have their shares exchanged for registered ones until 1 January 2021.
Setting up an NV
You need a notary in order to set up an NV. The notary draws up the notarial deed containing the articles of association. The with then registers your NV with the Commercial Register.
All directors are also registered in the Commercial Register. Until this is point, you are personally liable. In addition, you need to invest at least € 45,000 as starting capital.
NV in formation
You can start doing business with your NV before it has been established. However, it is then mandatory to register your company with the Commercial Register. A notary must declare to take care of the establishment. The NV will come forward as an ‘NV in formation’ (in Dutch: NV in oprichting or NV io) until it is established.
You must clearly convey to your business partners that all contracts in this phase are being established on behalf of the ‘NV in formation’. After its formation, the public limited company can only take over a contract if the other party agrees. Please not that you are personally liable as long as you act on behalf of the ‘NV in formation’.
If you want to set up an NV, you need a starting capital of € 45,000.You also pay notary fees, registration fees at Netherlands Chamber of Commerce and accounting fees. The notary fees may differ per notary. On average the costs range between € 500 and € 2,200. You pay a one-time fee of €50 for registration at the KVK.
In addition, there are costs for bookkeeping. Every year your NV must draw up annual accounts and file them with the Netherlands Chamber of Commerce. The information you have to submit depends on the size of your company. The annual administration costs depend on the size and complexity of your company.
Parliament is currently discussing the implementation of a UBO register for Dutch businesses in 2020. If it is accepted, public limited companies that are not listed in the stock exchange and are registered in the Dutch Commercial Register will have to include their 'ultimate beneficial owner(s)' or UBOs in this UBO register. This is one of the measures taken in accordance with the Prevention of Money Laundering and Terrorism Financing Act (Wet ter voorkoming van witwassen en het financieren van terrorisme, Wwft). Persons who have more than 25% of the company shares, more than 25% of the voting rights, and/or have the ultimate say in company matters are considered UBOs. Inclusion in the UBO register can be arranged via the website of the Netherlands Chamber of Commerce KVK. Companies that were already registered in the Commercial Register will have a year and a half to register their UBOs. See for more information (in Dutch) Rijksoverheid.nl.
You pay corporate income tax (vpb) on the profit of the NV. You may use corporate income tax deductions, such as various forms of investment allowance. If the NV pays dividend to shareholders, the NV has to withhold dividend tax on this amount. The NV also pays VAT.
If you are a director of a public limited company, you pay income tax on your wages and dividend tax on your shares. Directors must be paid a market conform salary, with in principle a minimum annual salary of € 46,000. Read more about the exact rules and conditions here (in Dutch).
An NV is a legal entity. This means that directors are not liable for debts. However, there are exceptions to this rule. For example, directors are liable in the event of maladministration, or if the private limited company is not yet registered with the Commercial Register. If you are a shareholder, you are only liable up to the amount of your shares.
Directors may either jointly or individually sign contracts or perform certain legal acts on behalf of the company. This is stated in the articles of association.
Directors can also give someone else power of attorney. This person may then also act on behalf of the company. It is not mandatory to register this person with the Commercial Register, however, it can be useful. For example, it is a way to inform your business partners about who is allowed to act on behalf of the company.
With an NV you can hire personnel. You have to pay payroll taxes and social contributions for your employees. If you are hiring employees for the first time, you must register as an employer with the Dutch Tax and Customs Authorities. You must also report this to the Netherlands Chamber of Commerce. Find out what else you need to arrange when hiring staff for the first time.
Insurances and pension
As a director you are employed by the NV and covered by social insurance. There are exceptions, namely if you:
- Have 50% or more of the votes at the shareholders' meeting (possibly together with your spouse)
- and your immediate family members own two thirds or more of the shares
- cannot be fired against your will
In this case you can take out an insurance yourself. Read more about insurances and pension as a sole proprietor.
Ending an NV
A formal decision from the general meeting of shareholders is required in order to end an NV. The NV then needs to pay off debts and dividend before it ceases to exist.
With an NV you can buy or sell on the stock exchange. To do so, you must meet a number of conditions. For example, your company must be in existence for more than 5 years, the equity must be at least equal to 5 million euros and the total value of the shares must be more than 5 million euros. Your company also had to be profitable for at least 3 years in the past 5 years.
Getting a Legal Entity Identifier (LEI)
Every company that owns shares and wants to trade on the stock exchange, must have a LEI or Legal Entity Identifier. This unique number is used by the financial authorities to track global transactions and ensure they are above board. You can purchase a LEI from the Chamber of Commerce if you are registered in the Commercial Register.
Statistics: public limited companies
Number of public limited companies.