The private limited company (BV)

Are you thinking about the incorporation of a private limited company in Rotterdam? Kooijman Autar guides you through the process. A private limited company or ‘BV’ is a legal entity whose capital is divided into shares. Shareholders contribute capital to the company in return for shares, which represent their financial interest in the company and the control they exercise over the company. Ask us for more information about the legal process of incorporation of a company or BV in the region of Rotterdam.

Incorporation of a new private limited company in Rotterdam

Incorporation allows you to form a company or a corporate entity. The incorporation of a private limited company must be executed by means of a notarial deed. The deed of incorporation will include the company’s Articles of Association. The initial capital of the company can be as little as one euro cent. If the amount is higher, the shares also have a higher value.

Once the incorporation of the private limited company is complete, it must be registered in the Trade Register kept by the Chamber of Commerce – they have offices throughout the Netherlands, including in Rotterdam.

Which Governing Bodies are present in a private limited company (BV)?

Every private limited company has a General Meeting (of Shareholders) and a Board of Directors. The Board of Directors consists of one or more directors who are responsible for the day-to-day management of the company. They are appointed with the incorporation of a new private limited company, and notary firm Kooijman Autar in Rotterdam can advise you on this matter.

All shareholders are entitled to exercise their voting rights at the General Meeting, which is the highest governing body within the company structure. We also advise to draft shareholders’ agreements. The General Meeting is entitled:

• to appoint and remove directors from office.
• to amend the Articles of Association.
• to pass a resolution to dissolve the company.

A private limited company can also have a Supervisory Board. This body oversees the activities of the director(s), providing support and advice, as necessary.

How does liability of the shareholder(s) work?

The liability of each shareholder is limited to the amount which he or she has contributed to the capital of the company.

In principle, the directors, and the members of the Supervisory Board of a private limited company, have no individual liability, except where mismanagement or negligent supervision can be shown. If the company has suffered loss or damage as a result, the directors or members of the Supervisory Board can be held personally liable. Our specialists in the region of Rotterdam are happy to explain every aspect of the legal process of the incorporation of a private limited company or any other kind of matter regarding to civil law, for example settling the estate of a deceased person.

Pay attention to the distinct kinds of profit taxation

A private limited company must pay corporation tax on its profits.

Each shareholder can be assessed for income tax in either Box 2 or Box 3 in the Netherlands. A holding of at least 5% of the shares in a private limited company qualifies as a substantial interest. In this situation, any dividend received from the company is subject to income tax and qualifies as taxable income in Box 2. If you hold less than 5% of the shares (of a particular class) in a private limited company, the value of the shares is taxed annually in Box 3 as income from savings and investments.

If you are a director of a private limited company in which you hold a substantial interest, you must also draw a salary which is taxed in Box 1. In most cases, it is more tax-efficient to take your remuneration in the form of dividends rather than a salary. However, there are tax rules to be observed, including the requirement that a director of a private limited company who also holds a substantial interest must receive a ‘customary’ salary.

A director/shareholder who cannot be removed from office (because the Articles of Association allow him to block a proposal to do so) is not deemed to be an employee for the purposes of social insurance liability. The company is therefore not required to pay employed persons’ insurance scheme contributions on his or her management fee. Book an appointment with one of our specialists in Rotterdam for more information about the incorporation of a private limited company.

 

Schedule an appointment with our corporate specialists

Please contact us for further information and advice about the incorporation of a private limited company and the consequences of doing so, for example in Rotterdam or anywhere else in the Netherlands. We advise you on every aspect of the process. Call us on +31 (0)10 285 88 88 to schedule an appointment with one of our corporate specialists. They advise you on the incorporation of a new company in Rotterdam to the transfer of shares.

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