When you start a business, there comes a time when you'll wonder what legal structure is best for you. Should you operate as a sole proprietorship, through a legal entity, or form a partnership with others? The most important considerations will be liability, tax treatment, and image.

If you operate your business as a sole proprietorship, you are personally liable for its debts. Creditors can recover their debts from your entire personal assets. If you are married under community of property, your spouse may also lose their share of the joint assets if the sole proprietorship is seized by creditors. As a sole proprietorship, you pay income tax on the profits you make.

By using a BV, you are no longer personally liable for your company's debts, but your BV is. A BV is a legal entity. It independently holds rights and obligations. The BV has one or more shareholders and is managed by one or more directors. You can be a managing director and major shareholder (DGA). The shareholders and directors are not personally liable. If the BV goes bankrupt, your assets (your car, your house, your savings) are generally safe. This is only different if you, as a director of a BV, have really messed things up. In that case, you can be held liable. There must be evidence of improper management or mismanagement. An advantage of a BV is that the company can be sold by selling its shares. Therefore, you don't have to transfer all assets and liabilities separately.

A private limited company (BV) pays corporate income tax and, where applicable, dividend tax. The managing director/majority shareholder (DGA) of a BV also pays income tax on their minimum taxable salary and on distributed dividends. A BV has a slightly lower tax burden than a sole proprietorship, but higher costs, partly due to annual financial statement obligations and accounting fees. Starting from a profit of approximately €150,000, it becomes financially attractive to operate the business as a BV.

If you do business with others, you can organize this collaboration through a joint limited company (BV), where the entrepreneurs each hold a share package in the BV. It's also conceivable to collaborate not through a legal entity, but through a personal partnership. Personal partnerships include partnerships, general partnerships (vof), and limited partnerships (cv). These are not legal entities. They are not independent bearers of rights and obligations. They are agreements between two or more (legal) entities working together.

A partnership is an agreement in which two or more (legal) persons, practicing a profession (e.g., lawyer, accountant, dentist, medical specialist), enter into a partnership with the intention of sharing the mutually acquired profits. They contribute money, goods, labor, and/or goodwill. In a partnership, each partner is equally liable for the partnership debts. Partnership assets exist, primarily intended for the business creditors.

A general partnership (VOF) is an agreement in which two or more (legal) persons, in the context of conducting a business (for example, a bicycle shop, car dealership, butcher shop, or greengrocer), enter into a partnership with the aim of sharing the profits jointly achieved. The VOF has separate assets from the partners' assets. Despite its lack of legal personality, the VOF is considered a separate legal entity in society that can participate independently in legal transactions. Each partner is jointly and severally liable for the obligations of the VOF. This means that these obligations also apply to them personally. The VOF's creditors can therefore recover their claims from the partners' private assets. Furthermore, the VOF's creditors have priority over the partners' private creditors in recovering the VOF's separate assets.

Besides the partnership and the general partnership, we also have the limited partnership (CV). Also known as a partnership (or "partnership"), a form of financing. A CV has a managing partner and limited or silent partners. They only contribute funds. The managing partner is publicly responsible. They are personally and jointly and severally liable for the debts of the CV. The silent partner is only liable for the amount they contributed to the CV, but there are exceptions to this.

If you would like to better understand which business structure is most suitable for you, please contact us and we will discuss it together.

General

An association with full legal personality is established by notarial deed.

The purpose of the association indicates how it can participate in legal transactions. An association can operate a business. The purpose may not be exceeded.

The association must be established by two or more adult natural persons or legal entities. The association's board must consist of at least one adult natural person or legal entity. If a legal entity becomes a founder or director, its purpose must permit this.

Because the law stipulates that an association is dissolved by operation of law due to the complete absence of members, it must be established that the association has had at least one member since its inception.

The association has two bodies: the board and the general meeting. The general meeting consists of the members and has ultimate authority over the association.

The deed of incorporation contains the articles of association. The articles of association contain the core of the association's organization and structure. Regulations can further elaborate on specific topics. Regulations may not conflict with the articles of association.

Depending on the association's activities, it may be subject to corporate income tax. An association may also be subject to indirect taxes (including VAT).

Name

The association's name must be sufficiently distinctive from the names of existing associations or other legal entities. If the association operates a business, the provisions of the Trade Name Act apply. This Act prohibits, among other things, the use of a name that is lawfully used by another or that deviates only slightly from it. This is related to the nature of both businesses and their location, in order to prevent public confusion between the businesses. The rules of the Trade Name Act can serve as a guideline for assessing the admissibility of the name of an association that does not operate a business. We recommend checking the Chamber of Commerce website to see if your chosen association name or a similar name appears. The Chamber of Commerce may refuse to register an association in the Trade Register if it appears that the association's name appears in the Trade Register or if it appears that the association's name bears a strong resemblance to the name of an existing association or other legal entity.

Trade Register

After its incorporation, the association must be registered with the Commercial Register. The directors must also be registered, with their power of representation being specified. Until the association is registered with the Commercial Register, each director is jointly and severally liable with the association for any legal act by which they bind the association.

Goal

The association's purpose and activities may not conflict with public order. The association's purpose may not include making profit distributions to its members. Profit-making itself is not prohibited. Profits may, for example, be used to achieve the association's purpose.

Management

The directors are appointed and dismissed by the general meeting. The general meeting also determines the number of directors. Each director is obligated to the association and third parties to properly perform their duties. A director is personally liable for improper management unless they can demonstrate that they are not seriously at fault and have not been negligent in taking measures to avert the consequences of improper management. Serious negligence may arise, for example, if it is established that the director knew or reasonably should have understood that the actions they initiated or permitted would result in the association failing to fulfill its obligations and would also not provide redress for the resulting damages.

When a legal entity is a director, liability rests jointly and severally with those who were directors of the legal entity at the time the liability arose.

Representation

The association can always be represented by the board (all directors jointly). The articles of association can also stipulate that the association can be represented by each director individually or only by two directors acting jointly. Combinations are also possible, for example, the chair of the board is authorized to represent the association independently, while the other directors are only authorized jointly. The board is authorized to grant power of attorney to one or more directors and to third parties.

If the association potentially acquires registered property (including real estate), the authority to do so must be explicitly stated in the articles of association. This also applies if the association needs to act as surety or be jointly and severally liable for the obligations of third parties. The board may only enter into these legal transactions with the approval of the general meeting. Without this approval, the board cannot legally bind the association.

Financial year

The association's financial year coincides with the calendar year. It is possible to designate the association's first financial year as an extended financial year; in that case, the first financial year ends not on December 31 of the year of incorporation, but on December 31 of the following year.

Financial accountability

The board is required to maintain records so that the association's rights and obligations can always be known. The board is required to convene a general meeting annually within six months of the end of the financial year and to report to it on the association's affairs and the policies pursued during the past financial year. At this meeting, it also submits the balance sheet and the statement of income and expenditure it has drawn up for approval to the general meeting. The association's books and records must be retained for seven years.

When an association maintains a business and achieves a certain net turnover (at least € 4,400,000), the annual accounts law applies to it.

Differences between an association and a foundation

The differences between an association and a foundation are small, but not insignificant. Quite the opposite. Making the wrong choice could put you in violation of the law. And if you discover you've made the wrong choice, changing your legal structure can be quite costly. Not to mention all the effort it will cost you. Make your choice between establishing a foundation and an association based on all available information. What are your concrete plans for the first year? What developments will occur in the first five years?

A cooperative, usually called a co-op, enters into agreements with and on behalf of its members. The association focuses on collaboration. Well-known examples include farmers purchasing agricultural machinery for shared use and supermarkets purchasing products collectively. Establishing a cooperative requires a notary. The cooperative is by and for the members, with the goal of achieving economic benefit. This need not be solely profit-making, but can also include cost savings or other advantages, such as the ability to generate sustainable energy.

Legal entity

A BV (private limited company) is a legal entity. Besides the BV, there are other legal entities in the Netherlands, such as associations, cooperatives, mutual insurance companies, public limited companies, and foundations.

A BV (private limited company) is a company with capital divided into shares. This allows you to limit your liability. A BV is a private limited company. Therefore, BV stands for private limited company. A BV is an independent bearer of rights and obligations. It can therefore participate in legal transactions, just like a natural person. Just like people like you and me.

This means you, as a private individual, can enter into a contract yourself, for example, a lease agreement. But a private limited company (BV) can do the same. In that case, the BV itself is liable for the obligations under that agreement. Not the board or you as a director. Not even with your own assets, but only with the shares you hold in that BV. Your liability is therefore limited.

The limitation of your personal liability makes a BV so suitable for entrepreneurship. Creditors of a BV cannot recover their debts from the entrepreneur's personal assets. Unlike a sole proprietorship or a general partnership (VOF), the assets of your BV and your personal assets are therefore separate. All your personal assets, such as your home, car, and the balance in your bank and/or securities account, are protected by a BV—unless there is evidence of improper management. This security is a key reason why entrepreneurs often choose the BV legal structure.

Notarial deed of incorporation

Incorporation is always effected by a notarial deed of incorporation. This deed also contains the articles of association drawn up by the notary. These are the internal rules of the private limited company.

Our firm has dozens of highly sophisticated and fully up-to-date model articles of association for all kinds of private limited companies (BVs). These include holding companies, operating companies, special purpose vehicles (SPVs), project companies, joint venture companies, director-major shareholder companies (DGAs), healthcare companies, savings companies, and pension companies. And many more types of BVs with a wide range of conceivable variables. Sometimes, truly customized solutions are required.

Articles of association

What does the BV's articles of association contain?

Name

The articles of association contain the name of the private limited company (BV). A good name is recognizable, prevents confusion, is memorable, and clarifies what you offer. A suitable company name gives your business the right image. However, the name must comply with certain rules.

Seat

The articles of association of a private limited company (BV) specify a statutory seat. The statutory seat is the BV's formal place of residence. This must be a municipality in the Netherlands. The BV can, however, conduct its business elsewhere.

Shares and capital

The company's capital is divided into shares. These shares are held by the shareholder(s). These are the founders, or those to whom shares are issued or transferred.

There are different types of shares: ordinary shares, priority shares, preference shares, letter shares, and since 2012, with the introduction of the Flex BV, also non-voting shares and non-profit shares. Voting rights—control—are then decoupled from the right to profit, the dividend.

The latter can also be achieved by certifying shares. With certification, shares are transferred for administration purposes to a foundation administration office (Stak), which in turn issues share certificates. These certificates entitle the certificate holder to dividends. Voting rights are vested in (the board of) the Stak.

Shares can be paid for in cash or in kind. You can establish a Flex BV with capital as low as €0.01.

Contribution on shares

It is possible that when a BV is established, no cash payment is made on the shares, but that a sole proprietorship is converted into a BV with an asset and liability contribution.

This method is the most common way to convert a sole proprietorship into a private limited company (BV). It's also the simplest and cheapest. After the conversion, the business risks of the owner of the existing sole proprietorship or the owners of a general partnership are transferred to the new BV.

In this conversion, all assets and liabilities (possessions and debts) of the general partnership or sole proprietorship are transferred to the new private limited company (BV). Transferring all assets and debts is often done for a symbolic amount of €1. Because there is a difference between the symbolic amount and the actual value of the assets and debts, you, as a shareholder, acquire a claim against the BV. However, you should be aware that the tax authorities are monitoring the situation. If there are so-called hidden reserves, such as goodwill or a capital gain in your business premises, you must pay income tax on them.

Silent conversion of a sole proprietorship to a private limited company

In a silent conversion, the sole proprietorship is transferred entirely to the private limited company (BV) without the business being discontinued. There is no tax settlement for the sole proprietorship, and the owner of the sole proprietorship becomes the founder of the BV. Therefore, there is no potential shareholder claim. The new BV starts with a balance sheet equal to the closing balance of the sole proprietorship or general partnership.

If you submit a request to the Tax Authorities before October 1 of the current year, the silent conversion can take effect on January 1.

Noisy conversion of sole proprietorship to BV

With a smooth conversion, the sole proprietorship is discontinued. As with a conversion with a contribution of assets and liabilities, there is no settlement. The private limited company (BV) takes over the assets and liabilities of the sole proprietorship. Note: If you want to sell your business within three years, you must use a smooth conversion. With a silent conversion, you cannot dispose of the shares for a period of three years.

A contribution description is always required for contributions in kind. The founder, in consultation with their accountant, must submit this to us. A deed of contribution must also be executed upon the contribution.

Blocking arrangement

You can't simply sell shares in a private limited company (BV). This is only permitted with the approval of the shareholders. A BV often has a blocking arrangement for this purpose. Therefore, the BV has a private nature.

Organs | general meeting, board, supervisory board

A private limited company (BV) has several bodies. These bodies include, at a minimum, the general meeting of shareholders (GMS) and the board of directors. Shareholders have economic and controlling rights. They are entitled to the company's profits and can appoint and dismiss directors. The board of directors represents the company. The board of directors can be a natural person or a legal entity. The first directors are appointed in the deed of incorporation.

Sometimes a private limited company (BV) has other bodies, such as a supervisory board (SB). A SB is not mandatory.

Representation

The BV is represented by the board of directors or by members of the board. A director may hold the power of representation independently or jointly with one or more other directors. The board's authority is unlimited and unconditional.

Who is authorized to represent a private limited company (BV) can be found in the Trade Register of the Chamber of Commerce. The Trade Register can also specify whether a director is authorized independently or only jointly with another director to bind the BV to legal acts. A BV can only object to a restriction of its representative authority in the articles of association against a third party if the restriction is registered in the Trade Register of the Chamber of Commerce.

Advantages

Setting up a BV has many advantages:

• There is no personal liability for the BV's debts, except in the case of improper management.
• Better tax treatment. The lower corporate tax rate of 16.5% or 25% and income tax on the minimum director-major shareholder salary. So, if you make a profit of more than €80,000, you're better off with a private limited company (BV).
• Better asset protection.
• No (own) money needed.
• Professional presentation and therefore a better image to the market.
• Interesting for investors, sellers, buyers, and financiers. You can issue, transfer, and pledge shares.

A private limited company (BV) has few disadvantages. However, you do need to consider the incorporation costs, governance, and compliance; additional administration is involved. For example, you must submit annual financial statements to the Chamber of Commerce every year.

Holding structure

You might consider setting up a holding structure right away.

A holding company is a regular private limited company (BV) that holds shares in the company where its activities and operations take place. This BV is also called an operating company or operating company. With a simple holding structure, you, as a natural person, hold 100% of the shares in the (personal) holding company. The holding company, in turn, holds the shares in the operating company.

It's highly recommended to establish a holding company alongside your private limited company for several reasons. For example, a holding company offers numerous tax advantages. The holding company also allows you to easily safeguard the assets accumulated in the operating company within the holding company itself. This way, you avoid the risk of losing valuable assets, such as trademark rights or a successful website, in the event of bankruptcy.

Shareholders' agreement

If there are more than two shareholders, it's wise to document how they interact—in addition to what the law and the articles of association stipulate. This is especially true if you're good friends. We document how you interact in a shareholders' agreement. This requires a tailored approach. What do the shareholders intend to arrange with each other? What is the duration of the agreement? How do you handle a change of control ? How do you handle an exit ? Do you want a drag-along or a tag-along ? Do you combine this with a right of first refusal or a come-along ? What do you do in the event of a deadlock ? How do you determine the value of the shares? For which shareholders' meetings do you require unanimity? What agreements do you agree on regarding financing requirements? What does your dividend policy look like? Do you want a non-compete and non-solicitation clause? Should a chain clause and penalty clause be included? Should rights be transferable or not? How do you avoid being saddled with shareholders you can't handle? We're happy to guide you through this maze of questions and considerations in a structured manner. We know the pitfalls and want to protect you from them.

Managing Director Major Shareholder (DGA) and salary

If you start a private limited company (BV), you quickly become a managing director (DGA). According to the Dutch Tax and Customs Administration, the managing director must, in principle, pay themselves a salary of €47,000. This isn't necessary if the money isn't (yet) available, for example, if you're a newcomer. We can advise you on this.

Holding structure

You might consider setting up a holding structure right away.

A holding company is a regular private limited company (BV) that holds shares in the company where its activities and operations take place. This BV is also called an operating company or operating company. With a simple holding structure, you, as a natural person, hold 100% of the shares in the (personal) holding company. The holding company, in turn, holds the shares in the operating company.

It's highly recommended to establish a holding company alongside your private limited company for several reasons. For example, a holding company offers numerous tax advantages. The holding company also allows you to easily safeguard the assets accumulated in the operating company within the holding company itself. This way, you avoid the risk of losing valuable assets, such as trademark rights or a successful website, in the event of bankruptcy.

To the notary

A civil-law notary is always involved in establishing a private limited company (BV). We've already discussed this. But do you really need to visit the notary in person? The individuals establishing a BV must personally identify themselves. This is to prevent abuse. You can also grant us a power of attorney. This is useful if not all the founders are available at the same time.

You might be wondering what a notary actually does and whether it can be done more affordably. We understand your concerns. We're consumers ourselves. We also personally weigh the price against quality, service, and goodwill. We recognize the need to manage your budget for notarial services and that our charges should represent value for money. We can offer you peace of mind, reliability, and security at a low cost because we are state-of-the-art and have well-organized processes. For more information, please visit: What exactly does a notary do for what I pay them?

Shareholder register

When a private limited company (BV) is incorporated, the notary creates a digital shareholder register and stores it in your My Notary File. You can print it yourself or leave it there. The shareholder register is a document that includes details of the BV's shareholder, the date of incorporation, and its share capital. It's not uncommon for the shareholder register to be lost, resulting in confusion about the BV's shareholders. This is important, for example, when selling shares and determining the share ratio.

To the Chamber of Commerce

The BV must be registered in the Chamber of Commerce's trade register. We can do this for you. We'll also provide you with an extract proving the registration. You'll receive the Chamber of Commerce invoice directly from the Chamber at your BV's address.

Compliance

The government has a policy aimed at preventing money laundering and terrorist financing. This includes all forms of fraud (such as bankruptcy fraud and tax fraud) and bribes (corruption). Therefore, almost all service providers, including us as civil-law notaries, are legally obligated to conduct client due diligence when providing certain services, monitor clients, investigate the origin of the funds used, and report unusual transactions to a national reporting center. These obligations are stipulated in the Money Laundering and Terrorism Financing (Prevention) Act (Wwft). Therefore, based on legal guidelines, we must verify who establishes the private limited company (BV), where the money comes from, who the Ultimate Beneficial Owner (UBO) is, and whether a Politically Exposed Person (PEP) is involved. We also register the UBO in the Chamber of Commerce trade register and, of course, provide you with an extract.

General

A foundation is a legal entity and is established by notarial deed.

The foundation's purpose indicates how it can participate in legal transactions. A foundation's purpose need not be limited to an idealistic or social goal. A foundation can maintain a business. The purpose may not be exceeded.

The foundation must be established by one or more adult natural persons or legal entities. The foundation's board must consist of at least one adult natural person or legal entity. A founder does not have to also become a director. If a legal entity becomes a founder or director, its purpose must permit this.

The foundation has one body, the board.

The deed of incorporation contains the articles of association. The articles of association contain the core of the foundation's organization and structure. Regulations can further elaborate on specific topics. Regulations may not conflict with the articles of association.

Depending on the foundation's activities, it may be subject to corporate income tax. A foundation may also be subject to indirect taxes (e.g., VAT). After the foundation is established, you will receive further information about this from the tax authorities.

Name

The foundation's name must be sufficiently distinctive from the names of existing foundations or other legal entities. If the foundation maintains a business, the provisions of the Trade Name Act apply. This Act prohibits, among other things, using a name that is lawfully used by another or that deviates only slightly from it. This is related to the nature of both businesses and their location , in order to prevent public confusion between them. The rules of the Trade Name Act can serve as a guideline for assessing the admissibility of the name of a foundation that does not maintain a business. We recommend checking the Chamber of Commerce website to see if your chosen foundation name, or a similar name, is listed.

The Chamber of Commerce may refuse to register a foundation in the Trade Register if it appears that the name of the foundation appears in the Trade Register or if it appears that the name of a foundation bears a strong resemblance to the name of an existing foundation.

Trade Register

After its establishment, the foundation must be registered with the Trade Register. The directors must also be registered, with their authority to represent them. Until the foundation is registered with the Trade Register, each director is jointly and severally liable with the foundation for any legal act by which they bind the foundation.

Goal

The foundation's purpose and activities may not conflict with public order. The foundation's purpose may not include making distributions to founders or to those who are members of its bodies (in this case, the directors), nor to others, unless, in the case of the latter, the distributions have a non-profit or social purpose. Profit-making is not prohibited per se. For example, profits may be used to achieve the foundation's purpose.

Management

The directors are appointed and dismissed by the board (co-option). The board also determines the number of directors. Each director is obligated to the foundation and third parties to properly perform their duties. A director is personally liable for improper management unless they can demonstrate that they are not seriously at fault and have not been negligent in taking measures to avert the consequences of improper management. Serious negligence may arise, for example, if it is established that the director knew or reasonably should have understood that the actions they initiated or permitted would result in the foundation failing to fulfill its obligations and would also not provide redress for the resulting damage. When a legal entity is a director, liability rests jointly and severally with those who were directors of the legal entity at the time the liability arose.

Representation

The foundation can always be represented by the board (all directors jointly). Furthermore, the articles of association can stipulate that the foundation can be represented by each director individually or only by two directors acting jointly. Combinations are also possible, for example, the chair of the board is independently authorized to represent the foundation, while the other directors are only jointly authorized. The board is authorized to grant power of attorney to one or more directors and to third parties. If the foundation may acquire registered property (e.g., real estate), the authority to do so must be explicitly stated in the articles of association. This also applies if the foundation needs to act as surety or be jointly and severally liable for the obligations of third parties.

Financial year

The foundation's financial year coincides with the calendar year. It is possible to designate the foundation's first financial year as an extended financial year; in that case, the first financial year ends not on December 31 of the year of incorporation, but on December 31 of the following year.

Financial accountability

The board is required to maintain records so that the foundation's rights and obligations can always be known. The board is required to prepare the foundation's balance sheet and statement of income and expenditure annually within six months of the end of the financial year. The foundation's books and records must be retained for seven years.

When a foundation maintains a business and achieves a certain net turnover (at least € 4,400,000), the annual accounts law applies to it.

Differences between a foundation and an association

The differences between a foundation and an association are small, but not insignificant. Quite the opposite. Making the wrong choice could put you in violation of the law. And if you discover you've made the wrong choice, changing your legal structure can be quite costly. Not to mention all the effort it will cost you. Make your choice between establishing a foundation and an association based on all available information. What are your concrete plans for the first year? What developments will occur in the first five years?

A partnership is an agreement in which two or more (legal) persons, practicing a profession (e.g., lawyer, accountant, dentist, medical specialist), enter into a partnership with the intention of sharing the mutually acquired profits. They contribute money, goods, labor, and/or goodwill. In a partnership, each partner is equally liable for the partnership debts. Partnership assets exist, primarily intended for the business creditors.

A general partnership (VOF) is an agreement in which two or more (legal) persons, in the context of conducting a business (for example, a bicycle shop, car dealership, butcher shop, or greengrocer), enter into a partnership with the aim of sharing the profits jointly achieved. The VOF has separate assets from the partners' assets. Despite its lack of legal personality, the VOF is considered a separate legal entity in society that can participate independently in legal transactions. Each partner is jointly and severally liable for the obligations of the VOF. This means that these obligations also apply to them personally. The VOF's creditors can therefore recover their claims from the partners' private assets. Furthermore, the VOF's creditors have priority over the partners' private creditors in recovering the VOF's separate assets.

Besides the partnership and the general partnership, we also have the limited partnership (CV). Also known as a partnership (or "partnership"), a form of financing. A CV has a managing partner and limited or silent partners. They only contribute funds. The managing partner is publicly responsible. They are personally and jointly and severally liable for the debts of the CV. The silent partner is only liable for the amount they contributed to the CV, but there are exceptions to this.

A notarial deed is required for the issue and delivery of a share or the establishment of a pledge on shares. We are happy to take care of this for you. We will then include the title of the legal transaction in the deed of delivery, for example, a purchase, and verify how the share was acquired. We are required by law to include this in the deed. We ensure that the company acknowledges the delivery and that the shareholder register—often referred to as "Jantje's notebook"—is accurately updated. If the BV turns out to be a so-called Article 4 entity as referred to in the Dutch Transfer Tax Act, we can advise you on how to save on transfer tax.

It's not nice when others know more about you than you'd like. The Chamber of Commerce is an open book, and who knows who, and with what motives, is rummaging through that public information. For example, you're obligated to identify yourself as the sole shareholder. This is often undesirable, and it can also jeopardize your safety. An anonymity structure helps in this situation. You create this structure by separating legal and economic ownership. We call this certification. You can also do this for other valid reasons. For example, if you want the economic rights to be transferred to one party but consider it appropriate for an independent board to exercise control. We see this often in family relationships. With certification, you transfer shares for the purpose of administration to an established trust office foundation, which, in return for the acquisition of those shares, issues an equal number of share certificates. The trust conditions stipulate the terms of certification and, for example, the conditions for transferring certificates. It's important that the trust office foundation has an independent board. Legal authority then rests with the foundation's board, while the certificate holders are economically entitled to the certificates. They are entitled to dividends and liquidation distributions. However, the board of the AK foundation is in charge.

Not only shares, but often also art or a family home are certified. Certification prevents family members from clashing during the division of the inheritance if, for example, all heirs have their sights set on that one painting. By transferring the painting to a foundation administration office and gifting each heir an equal number of certificates, you can avoid a lot of hassle. Taxation also plays a major role here. Works of art are not subject to tax. There is an exemption for art in Box 3. Certificates, on the other hand, can be taxed. But by donating certificates in phases, you can save on gift and inheritance tax.

The life of a legal entity is governed by law, articles of association and agreements.

The articles of association of a BV contain, in broad terms, subjects such as:

• definitions
• name
• statutory seat
• goal
• capital, shares, payment obligation
• shareholder register
• usufruct, pledge and certification
• change of capital
• issuance and transfer of shares
• shareholder rights, obligations and requirements
• general meeting
• management
• representation
• financial year, annual accounts, annual report, discharge
• profit and distributions
• possibly a supervisory board

The articles of association of an association contain, in broad terms, such matters as:

• definitions
• name
• statutory seat
• goal
• general meeting
• management
• representation
• financial year, annual accounts, annual report, discharge

The articles of association of a foundation contain, in broad terms, subjects such as:

• definitions
• name
• statutory seat
• goal
• management
• representation
• financial year, annual accounts, annual report, discharge

Much can change during a legal entity's lifetime, including during its lifetime. For example, the name may become outdated, the registered office may need to be relocated, capital may need to be reduced in the case of a private limited company (BV), or new shares may be issued, new classes of shares may need to be created with specific rights, or the articles of association may no longer comply with current legislation. In these—and many other cases—amending the articles of association is necessary.

Only a notary is authorized to draw up a deed of amendment to the articles of association. We can advise you on what you should and should not include.

We can also draft the decision-making process preceding the amendment to the articles of association – the shareholder or board resolution or the minutes of the general meeting of shareholders – and ensure that the amendment is registered in the Chamber of Commerce trade register.

We recognize three types of mergers: the stock merger, the corporate merger and the legal merger.

In a stock merger, the shares of the merging companies are exchanged. Shareholders receive a shareholding in each other's company.

In a business merger, the company's assets and liabilities are transferred. The difference with a share merger is that the assets and liabilities are transferred, not shares. For contractual obligations and liabilities, creditors' consent is required to assume the obligation.

In a legal merger, the assets of one or more legal entities are transferred to the acquiring legal entity under universal title. The acquiring legal entity legally replaces the disappearing legal entity. The major advantage of a legal merger over a business merger is that the assets of all disappearing companies are transferred by operation of law. For this reason, a legal merger is used to quickly and easily reorganize within a group.

The steps to achieve a legal merger are as follows:

1. The boards of the legal entities to be merged draw up a merger proposal.
2. All directors involved sign the merger proposal. If a signature is missing, the reason is stated.
3. The boards prepare an explanatory memorandum. This explanatory memorandum describes the expected legal, economic, and social consequences.
4. The boards of directors file the merger proposal with the Chamber of Commerce, together with the last three approved annual accounts.
5. The proposed merger is announced in a nationally distributed newspaper.
6. Creditors have one month from the date of the announcement to file an objection.
7. One month after the announcement, the shareholder resolution to merge is taken.
8. Within six months of the announcement, the merger will be realised by passing the notarial deed of merger.
9. Within eight days of the passing of the merger deed, the merger must be registered in the trade register of the Chamber of Commerce.

The steps do, however, require a precise procedure with strict and strict deadlines. It's therefore crucial to plan a proposed merger properly and promptly and to execute it carefully. We regularly deal with this and are happy to guide you.

The counterpart to a legal merger is a legal demerger. There are two forms of legal demerger: a pure demerger and a spin-off.

A pure demerger is a legal act in which the assets of one legal entity are acquired by two or more other legal entities under universal title. The legal entity whose assets are transferred ceases to exist upon the demerger.

In a spin-off, the assets, or part of them, are transferred to one or more acquiring legal entities. However, the demerging legal entity remains in existence.

There's also the possibility of a so-called "conflict demerger." This is a pure demerger in which a single legal entity with two or more shareholders is split into several companies, each with one shareholder. Such a demerger also offers the opportunity to incorporate a holding company structure into an existing legal structure.

Just like with a legal merger, in a legal demerger, the assets of the demerging entity are transferred to the acquiring entity under universal title. Therefore, the various assets that together form the assets do not need to be transferred separately. Furthermore, the transfer does not require the cooperation of creditors or contracting parties.

A demerger is subject to a statutory procedure, which is described in Articles 334a through 334ii of Book 2 of the Dutch Civil Code. This procedure includes the preparation of a demerger proposal, which must be filed with the Commercial Register. The demerger must be executed by notarial deed, and safeguards must be in place for the benefit of creditors of the demerging company. Once all legal requirements have been met, the demerger deed can be executed. The demerger takes effect the day after the demerger deed is executed.

Although the legal procedure entails a number of obligations that take some time to comply with, demerger can be a way to restructure a group or find a solution to disputes between shareholders.

If there are more than two shareholders, it's wise to establish how they will interact with each other—in addition to what the law and the articles of association stipulate. This is especially true if you're good friends. We document how you'll interact in a shareholders' agreement. This requires a tailored approach. What do the shareholders intend to arrange with each other? What is the duration of the agreement? How do you handle a change of control ? How do you handle an exit ? Do you want a drag-along and a tag-along ? Do you combine this with a right of first refusal or a come-along ? What do you do in the event of a deadlock ? How do you determine the value of the shares? For which shareholders' meetings do you require unanimity? What agreements do you agree on regarding financing requirements? What does your dividend policy look like? Do you want a non-compete and non-solicitation clause? Should a chain clause and penalty clause be included? Should rights be transferable or not? How do you avoid being saddled with shareholders you can't handle? We're happy to guide you through this maze of questions and considerations in a structured manner. We know the pitfalls and want to protect you from them.

When a private limited company (BV) is no longer viable or profitable, when the BV is inactive, when a pension fund (stamrecht BV) has become empty, or when you wish to clean up your corporate structure, you, as a managing director, can decide to dissolve the BV and subsequently liquidate it. Debts usually need to be settled and receivables need to be collected. We are happy to guide you through a liquidation, which takes approximately two and a half months, and we can also offer you the faster turbo liquidation option.

If there are assets upon dissolution, a liquidation must take place. The legal entity then continues to exist until the liquidation is completed. If the legal entity has no assets at the time of dissolution, it ends immediately. If the legal entity is dissolved, but there are subsequently discovered assets, the liquidation can be reopened. The legal entity is then revived solely for the purpose of completing the liquidation. Any interested party can submit a request to the court to reopen the liquidation. The directors of the dissolved company are the liquidators of the legal entity's assets. If the company's articles of association so stipulate, other persons can also be liquidators. This is up to you. If there is no liquidator, one will be appointed by the court. This is done at the request of any interested party or at the request of the Public Prosecution Service.

A private limited company (BV) can be dissolved by a resolution of the general meeting of shareholders. The articles of association usually require a special majority vote for such a resolution. The dissolution takes effect at the time the resolution is passed, or at a future date. A resolution to dissolve is always irrevocable and therefore cannot be reversed. The dissolution of a legal entity must be reported to the Trade Register. The dissolution of a legal entity does not always automatically mean that the legal entity has ceased to exist. The dissolved legal entity continues to exist if this is necessary for the liquidation of its assets. During this liquidation, current affairs are settled, receivables are collected, debts are paid, and inventory is sold. The liquidation is carried out by one or more liquidators. These are usually the same persons as the directors.

The words "in liquidation" must be added after the legal entity's statutory name in all documents and announcements. If, after payment of all debts, any assets of the dissolved legal entity remain, the liquidators must, in principle, distribute this surplus to the shareholders. The liquidation must be filed with the Chamber of Commerce. In all cases, the liquidators must also announce, through an advertisement in a national newspaper, where and until when the BV's books and records will be available for inspection by interested parties.

Turbo liquidation is the accelerated dissolution and dissolution of a private limited company (BV). Sometimes a BV has been inactive for years. In that case, the BV's balance sheet is empty. There are no assets or liabilities. In that case, a turbo liquidation can take place. Turbo liquidation is not possible in all cases. However, there are a number of do's and don'ts . In the event of a turbo liquidation, we can dissolve the BV within five business days through our personalized and accelerated turbo liquidation service. As a notary, we offer you peace of mind, reliability, and security. If you would like us to help you, please let us know.

We often provide legalizations, apostilles, and subsequent legalizations for individuals, companies, and other organizations. We specialize in corporate law, real estate, and family law. A legalization is a declaration from a notary stating that you signed a document in the presence of that notary or an employee of their office, and that you identified yourself with a valid ID. This confirms the authenticity of the signature. The declaration is often a sticker or stamp on the document.

Apostille and legalization

Legalization is often sufficient. However, if you intend to use a document abroad, you must ensure that the document (for example, an extract from the population register) is recognized as an official document abroad. It's important to check whether the country where you intend to use the document is a signatory to the Apostille Convention. If so, the document must be apostilled. If the country is not a signatory to the Apostille Convention, you must have the document legalized. We can arrange the apostille or legalization for you. We will then present the document we have legalized to the court. The court can only apostille or legalize the document if it contains an original signature and this signature has been registered in the national signature database. Signatures legalized by us are usually apostilled by the court quickly and without delay. You will pay court fees for requesting an apostille or legalization from the court. Payment options vary by court. You will receive the apostille or legalization after you have paid the court fee.

Additional legalization

Sometimes a country requires additional legalization. Therefore, always inquire with the consulate or embassy of the country in question.

What do you need to do to get legalization?

Our hostesses are available at the Hospitality Desk during office hours and will be happy to assist you immediately upon arrival. Please call ahead to schedule your arrival so we can ensure we can assist you immediately upon arrival. Bring the power of attorney or declaration you received to our office. Don't forget your valid ID and only sign your signature at our office in the presence of a staff member. Once your signature has been signed at our office, you don't always have to wait for the legalization process. We can arrange for the original legalized document to be sent to the agency that requested your signature the same or the next day. We will send you a digital copy for your records.