Different type of legal entities

The Netherlands has two types of limited liability companies with authorised capital divided into shares:

• Private Limited Company (Besloten Vennootschap or B.V.)
• Public Limited Company (Naamloze Vennootschap or N.V.)

Private Limited Company (Besloten Vennootschap or B.V.)

The Dutch private limited liability company ('B.V.') is the corporate vehicle most commonly used in international investments and business operations in The Netherlands.

The B.V. is the equivalent of the German GmbH, the French Sarl, the Spanish SL and the British Ltd.

The liability of shareholders in a B.V. is limited to their capital subscriptions. Shares may only be issued in registered form and transfer of shares is subject to certain conditions.

Public Limited Company (Naamloze Vennootschap or N.V.)

The Dutch public limited liability company (N.V.) is similar to the B.V., but bearer shares may also be issued and transfer of shares is not necessarily subject to restrictions.

The N.V. is comparable to the Spanish, French and Swiss SA, the US Inc. the German AG and the British Plc.

The N.V. is generally used for large publicly held companies.

Besides the limited liability companies the Dutch private foundation ('Stichting') and closed partnership ('gesloten commanditaire vennootschap') are often used in international structures.

The Dutch private foundation (Stichting)

The Dutch private foundation ('Stichting'), by virtue of law, is not allowed to have as aim the making of profits. A notarial deed is required for its incorporation. A Stichting can be used in a corporate environment, for instance as a foundation which holds shares in a company and issues depository receipts in exchange ('Stichting Administratiekantoor').

The Dutch Cooperative (Coöperatie)

A Dutch Cooperative (Coop, in Dutch: 'coöperatie') is an association incorporated by a notarial deed and has legal personality. It should have at least two members at incorporation. After incorporation the Coop can have one member. The liability of the members can be equal, limited to their contribution or excluded. Also a Coop has no minimum capital requirements and it can carry out any type of activity and can act as holding company or finance company.

The Dutch Limited Partnership (Commanditaire Vennootschap or CV)

A CV is a limited partnership concluded between one or more general and limited partners. It is concluded before a Dutch notary. The CV can be used for direct investments in real estate or in portfolio investments or for trading purposes such as the receipt of management fees or commissions.

Incorporation of a B.V.

Prior to the incorporation of a B.V. a name search needs to be conducted with the Chamber of Commerce. This search takes approximately 3 days.

Incorporation takes place by executing a notarial deed of incorporation before a public notary.

The execution of the Deed can only take place after the Ministry of Justice has approved the draft Deed of Incorporation by way of a so called ´Declaration of No-Objection´ ('verklaring van geen bezwaar').

Both legal entities and private individuals may act as incorporator.

Upon incorporation the company must be registered with the Trade Register of the Chamber of Commerce.

If the incorporator wishes to do business with third parties prior to the date of incorporation it is possible to register the company with the Trade Register as a B.V. (i.o.) (B.V. under formation).

The incorporator is liable for all his actions until the B.V. is incorporated and the activities are confirmed by the B.V.

The whole incorporation procedure takes approximately two to four weeks.

Share capital

A B.V. has a minimum authorised share capital of EUR 90.000,-. The paid in capital should at least be EUR 18.000,-. Payment on the shares may be made in cash or in kind. If, upon incorporation of a B.V., payment on the shares is made in cash, a statement from a bank should confirm that this amount is available to the company as share capital. If, upon incorporation of a B.V., payment on the shares is made in kind, the nature of the contribution must be specified by the incorporator(s).

Such specification together with a statement from an auditor, confirming that the value of the contribution is at least equal to the amount that has to be paid up on the shares, must be attached to the Deed of Incorporation.

[top]

© 2010 - FTC Trust B.V. - Disclaimer / Copyright