Hoping to set up a business in the Netherlands?

One of the first things you’ll have to do is pick a legal style. You can’t just fly solo without giving your business a legal tag. 

Dutch law isn’t rocket science, but gosh, it’s a handful when you’re browsing those Dutch websites. 

Alright, let’s start with the ABC’s, where we break down the difference between a business with a ‘legal personality’  and a business without one, and why it is so important to make a decision between those two. 

Legal personality explained 

‘Legal personality’ for corporations means that a company is seen as its own ‘person’ in the eyes of the law. They can buy stuff, make deals, and take the blame for their mess-ups, all without dragging their owners into the drama.

But if a business doesn’t have this fancy ‘legal personality’ thing, it’s basically just a hip extension of the owner. That means if the business messes up, it’s the owner’s headache to deal with (read: the owners are personally liable for the business’s actions and debts). 

Legal entities are more popular because of limited liability, while partnerships put all the weight on the folks running the show.

No legal personality 

Summary of ‘no legal personality’ 

•    Partnership between several persons without separate legal identity.
•    Partners are personally liable for debts.
•    No obligation to publish annual accounts.

A basic overview of businesses 

Type	Dutch name	Legal structure
Sole proprietor	Eenmanszaak (	No legal personality
General or commercial partnership	V.O.F. (Vennootschap onder firma)	No legal personality
Professional or public partnership	Maatschap	No legal personality
Limited partnership	C.V. (commanditaire vennootschap)	No legal personality

Legal personality 

Summary of ‘legal personality’:

• Legal identity separate from owners.
• Limited liability for owners.
• Obligation to publish financial statements.

Please note that when you create a legal company, a notary has to draft  some official papers for you such as – for example – the articles of association, and they have to sign you up at KVK so that your company becomes real.

A small overview of businesses 

Type	Dutch name	Legal structure
Private limited company	B.V. (Besloten Vennootschap)	Legal personality
Public limited company	N.V. (Naamloze Vennootschap)	Legal personality
Cooperative	Coöperatie	Legal personality
Association	Vereniging	Legal personality
Foundation	Stichting	Legal personality

This is the first in a series of blog posts on setting up a business in the Netherlands where we “translate” the legal terms into practical tips. Whenever we publish a new post on this topic, we’ll make sure to link it right here! If you have questions you’d like us to answer in one of the upcoming posts, please share those via email, and we’ll make sure to include those!