Netherlands - Company Incorporation
A BV may be incorporated by one or more shareholders, either being individuals or corporate bodies - an individual or company, whether Dutch or foreign, may be the sole shareholder and full Board of Management at the same time and no Company Secretary is required.
A besloten vennootschap (BV) is a company limited by shares, whose shares are privately registered and not freely transferable.
Each shareholder shall contribute to the initial capital - at least 25% of each contribution must be paid upon incorporation. No share certificates may be issued; shareholdings are registered in the shareholders register which must be kept in the office of the company.
A certificate of no objection must be obtained from the Justice Department upon presentation of full details of the incorporators and directors with a letter of recommendation. Thereafter the deed of incorporation will be executed before a notary public and filed at the Trade Register. The official deed of incorporation shall be in Dutch. It contains personal details of the Incorporator(s) and the initial Member(s) of the Board, as well as the amounts of their participation(s) and payment(s) to the initial capital. Furthermore, the deed contains the Articles of Association consisting of at least the Company name, the city where the company shall have its registered seat, the object of the company, the authorised capital in € and its division in shares, as well as the conditions for share transfer. The authorised capital is the maximum capital that may subsequently be issued without altering the Articles of Association. It may amount to a maximum of five times the initial capital.
The minimum capital to be paid up initially is €18,000. Except in case of contributions in kind, the initial capital must be deposited with a bank in Europe prior to incorporation (preferably a bank registered in The Netherlands). A commission has advised the Dutch government to end this requirement before the end of 2004. Within the EU many countries don't have such a requirement and since it is legal to use foreign limited companies in the Netherlands this could make the BV less interesting. To prevent this the requirements will be made more flexible.
Capital tax will be due from the company on incorporation and on any subsequent issuance of shares, at a rate of 5.5 per mil of the issued capital or of the paid up capital, whichever is greater. If payment on the shares is agreed to be made by contribution of assets other than cash, a recent valuation of such assets by a chartered accountant is required.
The Management Board has unlimited powers to act for the company, as do the individual Board Members unless restricted by the Articles of Association. The only restriction allowed, however, is to require joint signatures. Therefore, if one wishes to grant limited powers to a Director, he should either not sit on the Board, or only be granted joint powers; after which the Board if desired can supplement these powers with any type of standing or specific power of attorney granted to the same Director, in addition to his statutory powers. The only case where a Board Member will be precluded from validly representing the BV is when he has a personal interest in a specific transaction, unless the Articles of Association overrule this restriction.
Usually, the Board is appointed for an indefinite period. After incorporation, the authority to appoint and discharge Members of the Management Board rests with the General Meeting of Shareholders, unless such authority has been vested in a Supervisory Board in which a Works Council is represented.
A BV however can do without a Supervisory Board, as long as it employs less than 100 workers in The Netherlands.
Annual accounts have to be published when the company's turnover exceeds €7 million and balance sheet totals over €3.5 million.
The procedure of incorporation usually takes one to three months.
| Besloten Vennootschap (BV) | |
|---|---|
| Company Law | Burgerlijk Wetboek Art. 2:175 BW |
| Company purpose | free |
| Founders | 1 (minimum) cf Art. 2:175 lid 2 BW |
| Capital | €18,000 |
| Liability | restricted to the amount of issued and paid up capital |
| Incorporation | articles of association + registration with Commercial Registry + notarial deed + statement of no objection |
| Company name | not identical with or too similar to an existing company. Has to begin or end with the initials BV |
| Accounting obligation | yes |
| Management | managing board + supervisory board *3 |
