Setting up a BV provides personal protection, as the company it self is legally liable, unlike a sole proprietor ship, where you are personally liable. A BV also often offers tax advantages and makes transferring ownership easier. These benefits make a BV an attractive option, but the process involves several steps. This guide will help you get started.
Sole Proprietorship or Private Limited Company (BV)?
If you want to start your own business but are unsure whether to choose a sole proprietorship or a BV, this article is for you.
Before setting up a BV, you need to make some key decisions:
- Choose a company name: Check with the Chamber of Commerce (KvK) to ensure the name is available. If it is already taken, you cannot register your BV under that name.
- Determine the shareholder structure: Decide who will own the company and how the shares will be distributed.
- Start-up capital: Since 2012, no minimum capital is required. A BV can be established with as little as €0.01.
- Businessplan (optional): Useful for securing financing and structuring your business strategy.
A BV must always be established through a notary. The notary drafts the deed of incorporation, which includes the company's statutes. These statutes outline important aspects such as asset distribution, board responsibilities, and decision-making processes. The BV officially exists only once all founders have signed the deed.
Setting up a BV involves costs, including notary fees and potential legal document drafting expenses. These costs can vary depending on the complexity of the incorporation, so it is wise to budget accordingly.
The notary registers the BV with the Chamber of Commerce. Once registered, you receive a KvK number, which officially recognizes your company. This number is crucial for all business transactions and serves as proof of your company's existence.
After registration, the KvK automatically shares your details with the Dutch Tax Authorities, ensuring your company is also registered for tax purposes. Keeping your KvK number safe is essential, as it is required for administrative and legal purposes.
Once your BV is registered, the Dutch Tax Authorities automatically register it for corporate income tax. This means your BV must pay taxes on its profits.
Additionally, you must determine whether your BV is subject to VAT. This depends on factors such as business activities, expected revenue, and the nature of the products or services offered. If VAT applies, you must request a VAT number. Understanding and managing this process in time is crucial for compliance.
To keep personal and business finances separate, opening a business bankaccount is essential. This simplifies financial management and ensures clear accounting. Most banks require a KvK registration before opening a business account.
A business account in the BV’s name ensures all transactions are properly linked to the company. This is critical for tax filings and legal compliance.
Depending on your industry, you may need specific permits to operate legally. For example, a hospitality business requires a catering permit, while a construction company may need a building permit. Researching the necessary permits in advance prevents legal issues and delays.
Additionally, certain business insurances are advisable:
- Liability insurance: Protects against third-party claims, such as accidents on your premises.
- Disability insurance: Provides financial security in case you cannot work due to illness or injury.
These insurances help manage risks and ensure business continuity.
A BV is legally required to maintain proper financial records, including all transactions, annual reports, and tax filings. Proper bookkeeping provides insight into your company’s financial health and ensures compliance with tax regulations.
You can manage the administration yourself, but this requires time, accuracy, and financial expertise. Many entrepreneurs hire an accountant to handle bookkeeping and tax filings, ensuring everything is done correctly while allowing them to focus on business growth.
To register a BV, you need the following:
- A unique company name
- Shareholder details
- Notary deed of incorporation and statutes
- KvK registration
- VAT number (if applicable)
- Business bank account
Want to set up a BV without hassle? DKB-Finance is here to help with expert advice and guidance. Contact one of our specialists for a free consultation!
