Have you been working in a specific sector for a number of years and have you gained broad experience? If you will then launch yourself a similar company, you will have a good chance that your business will succeed. Do you have ideas to start a company within your industry with an innovative service or product? Then there is a chance that you will grow into one of the most successful companies in your sector.
To start your Dutch business, you will first have to set up a BV (a limited liability company). For this you will need the help of a Dutch civil notary. Within a few days, your BV can be founded and registered. Find here below information on the formation process.
Why establish a BV with a notarial deed?
The deed of incorporation is a legally required document in the Netherlands. It is necessary for a company to be established by a notary.
The notary will guide you through the formation process, because the establishment of a BV is the task of a notary. The notary will prepare draft articles for your limited liability company. After this, the deed of incorporation will be signed, which is called execution, and the BV will be registered in the trade register of the Chamber of Commerce.
What is stated in the articles of a BV?
Part of the deed of incorporation are the articles. These contain provisions that are often also stipulated in the Civil Code in combination with ‘good governance’ rules for your company. It is mandatory to include the following information in the articles of association:
– Name and place of business, also called seat, of the BV;
– Object of the BV;
– Types of shares and the amount that will be paid up on each share, also called nominal value;
– Conditions for the transfer of shares and blocking provision;
– Powers of the shareholders;
– Method of decision making;
– Appointment and dismissal of directors and possible supervisory directors;
– Rules for dissolution;
– Duration of the first financial year.
The financial year is usually the same as the calendar year. The first financial year can be extended to almost 24 months. This can be attractive in order to save on the costs of annual accounts and corporate income tax return.
Are there rules for the initial capital of a BV?
There is no mandatory start-up capital for a BV. This makes the setup of a BV very accessible. The starting capital may consist of cash, even in the form of a foreign currency. In addition, the capital can be paid in by means of a contribution in kind, such as with property.
What do you need to know about the share capital of a BV?
The capital of the BV is divided into shares owned by shareholders. It is also possible that all shares are owned by a sole shareholder. A distinction can be made between authorised capital (no longer mandatory since 2012), issued capital and paid-up share capital. Even with a sole shareholder, it is advisable to issue at least 100 shares. This to enable the future transfer of shares to potential business partners or heirs. For the reason of shareholder’s liability and tax purposes, it is wise not to postpone the paying up of any shares.
Which checks and balances exist within a BV?
You can establish a BV by yourself or with others. Each BV has at least three organs consisting of one or more members:
– General Meeting
It is also possible to appoint one or more supervisory directors in a supervisory board as fourth organ.
In the deed of incorporation, the first directors will be appointed and the names of the shareholders will be mentioned. After incorporation, any new directors will be appointed by the shareholders. The authority to dismiss any directors also rests with the shareholders. In case of a board consisting of multiple members, it is possible to choose for sole or joint authorisation.
Who will be responsible for the registration of the BV at the Chamber of Commerce?
A BV must always be registered in the trade register of the Chamber of Commerce. In most cases the notary will take care for registration of the Dutch company, its registered office address and directors. This will usually not take more than a day. At registration, the BV will be provided with a trade register number and fiscal number. Note that as long your BV is not yet registered, the founder will be liable.
How to start BV formation?
The above is a short ABC on business formation. The notary can answer all your questions and will go through the deed of incorporation with you prior to incorporation. Sometimes it will be wise to directly establish a holding company too, or in case of more shareholders, to draw up a shareholders’ agreement. Also, it is advisable to obtain advice of an accountant and tax specialist before set up. Contact us still today to have your business adventure started as soon as possible.