You have to take this into account when setting up the dutch BV
Most Dutch people who set up a business start a one men´s company. Nice and easy, because you only have to visit the Chamber of Commerce with your copy of your passport in your pocket and your company is registered nowadays can often also be done at your private address. But in many cases, a one men´s company is not attractive at all. Many entrepreneurs therefore make the choice, over time, the logical choice for a private company: private company.
A large part of the Dutch Self-Employed does not even set up a one men´s company at all, but immediately starts with a bv. But what does a bv actually mean, what should one take into account when you set up one, and also not insignificant: what can all that cost?
What is a dutch bv?
The abbreviation bv stands as mentioned earlier for private company. It is one of the most popular legal forms in the Netherlands. Unlike other legal forms such as the foundation or association, the bv is primarily intended to trade and thus make money. A bv has one or more directors, who can act on behalf of the bv. The bv is therefore a legal entity, which –although represented by a director or agent – can carry out acts itself, enter into agreements, etc.
E.g. or one men´s company? the main differences
There is a second common limitation on the advantage that an owner of a bv is not joint and severally liable. You notice this limitation especially if you are just starting a bv and need money to be able to invest. In such a case, a bank will generally only want to grant you a loan if you are a personal guarantor. In this way, at least in the early years of your bv, you are still a bit joint and severally liable.
In addition to joint and several liability, there are many other differences between a bv and a one men´s company. What is important for entrepreneurs who have doubts between a bv and a one men´s company: the bv traditionally exudes authority and commercial trust. Bv’s are professional companies and not hobbyists. The status of bv gives customers the signal that a company is serious, can be trusted and will not just leave with the northern sun. In short: this allows, in principle, business to be done with it.
Another advantage that you have as the owner of a bv is that you can issue shares and therefore also transfer the entire company to someone else. The company can therefore easily be transferred from, for example, father to son. You can also issue shares to family members, friends or acquaintances with whom you have a good relationship, to collect wealth and let them take a bite out of the company’s proceeds. None of this is possible at the one men´s company.
‘the tipping point to go from a one men´s company to a bv is around one and a half tons’
Finally, the status of e.g. has profound (often positive) tax consequences. For example, with a bv you fall under corporation tax, and no longer under income tax. If you make a lot of profit – the tipping point is around one and a half tons (€150.00) – then you will have a lot more left of that with a bv than with a one men´s company. So are things going well with your one men´s company? Then be sensible and quickly set up a bv and call, email or chat with us by referring to our house notary.
A short video about legal forms !