When choosing a legal form, you have more or less the following choices.
The sole proprietorship is a widely used legal form. In a sole proprietorship, there is no separation of private and business assets. If the company is held liable, the entrepreneur is liable with all his assets at stake, including his private assets. The bankruptcy of the company also results in the personal bankruptcy of the entrepreneur.
General partnership (the vof)
The general partnership is a legal form where two or more owners (the partners) contribute money, goods or labour. If the partners meet the requirements of the tax authorities, they can each make use of the fiscal benefits for entrepreneurs.
Agreements about the purpose of the general partnership and the liability, powers, contribution and distribution of profits are put into a partnership agreement. It is important that such an agreement is drawn up with well-nigh surgical precision. Our experienced company lawyers can help you with this.
In a general partnership, all partners are liable with their private assets for possible debts of the partnership. This also applies if these debts are caused by another partner. If the general partnership cannot meet its obligations towards its creditors, the partners are jointly and severally liable for any deficit. The bankruptcy of the general partnership thus can also results in the personal bankruptcy of the partners.
Private Limited Liability Company (The BV)
A private limited liability company is a legal entity with a capital divided into shares. The shares are not registered. By far the majority of BVs are in the hands of one person, the director-majority shareholder (or DGA). A shareholder is not personally liable for actions of the BV.
If the BV can no longer meet its obligations towards its creditors, in principle only the BV is liable. If the BV goes bankrupt, this does not mean that the shareholder’s or director’s will bankruptcy also be entailed.
This can be different if the director has not met his obligations under the articles of association or if he can be held liable for improper management of the BV. In such cases, the director can also be held personally liable for the company’s deficits.
Public Limited Company (The NV)
A public limited company is a legal entity with a capital divided into transferable shares. The requirements for setting up a public limited company are virtually the same as for establishing a private limited liability company (the BV). However, unlike BV, an public NV has a minimum share capital of € 45,000.
The same rules apply as to liability and the tax regime of an NV. Are you considering setting up an NV or converting your professional partnership or sole proprietorship into an NV? Are you a director of a BV and considering converting the entity to an NV? Or are you otherwise involved with an NV and would you like information about the consequences?