Leaving a Dutch VOF: exit, payout and liability

You can leave a Dutch general partnership (vennootschap onder firma, VOF) by giving notice, but without a continuation clause your exit dissolves the whole partnership. More importantly, you remain personally liable for the partnership’s debts from your time as a partner, unless the creditors release you.

Below we explain the legal framework, the difference between withdrawal and dissolution, how the exit payment is determined and how you limit your liability after leaving.

Which rules apply to a VOF?

A VOF is a partnership (maatschap) that runs a business under a common name (Article 16 of the Dutch Commercial Code, Wetboek van Koophandel, WvK). The partnership rules of Articles 7A:1655 and following of the Dutch Civil Code (BW) apply, unless the Commercial Code provides otherwise.

Unlike a private limited company (BV), a VOF has no legal personality. It does have separate partnership assets, but there is no separation between business and private assets when it comes to liability. Each partner is jointly and severally liable for all obligations of the partnership (Article 18 WvK). You can read the provisions in the Commercial Code on wetten.overheid.nl.

A bill to modernise the rules on partnerships has been pending for years. As long as it has not entered into force, the rules described here apply.

On which grounds does a VOF end?

Article 7A:1683 BW lists the grounds. The most common are notice by a partner, the expiry of an agreed term, and the death or bankruptcy of a partner.

A partner in a partnership entered into for an indefinite period may give notice. That notice must be given in good faith and not at an inopportune moment (Articles 7A:1686 and 7A:1687 BW). A partnership can also end when its purpose has been achieved. In addition, a partner can ask the court to dissolve the partnership for important reasons, such as a lasting breakdown of trust, serious mismanagement or a persistent conflict that makes cooperation impossible (Article 7A:1684 BW).

Does your exit end the whole partnership?

Yes, unless you agreed otherwise. Without a continuation clause, the withdrawal of one partner dissolves the entire VOF, which must then be wound up.

Many entrepreneurs assume that one partner can simply leave while the business continues. Legally, that is not the case. Dissolution leads to liquidation: the assets are sold, the debts are paid and the remainder is distributed among the partners (Article 32 WvK).

A continuation clause (voortzettingsbeding) in the partnership agreement prevents this. It allows the remaining partners to continue the business, with the assets and liabilities transferred to them. The departing partner then receives a payment instead of a share in the liquidation proceeds. The remaining partners may also continue to use the firm name under the conditions of Article 30 WvK. Without such a clause, the continuity of the business is at risk every time a partner leaves.

How is your exit payment determined?

First look at the partnership agreement: it usually sets out how the payment is calculated. If it does not, the parties or an expert determine the value, and disputes often follow.

In practice, the payment usually consists of three elements. The first is the capital account: your original contribution, adjusted for withdrawals and your share of profit and loss. The second is hidden reserves: the difference between the book value and the actual value of the assets. The third is goodwill: the value of the business’s future earning capacity.

If the agreement does not specify a valuation method, courts usually rely on an independent valuation expert. Which method is appropriate, such as a valuation based on expected cash flows or on the value of the assets, depends on the business and the circumstances. Partnership agreements may exclude goodwill or provide for settlement at book value. Such clauses are generally valid. The court only sets them aside if applying them would be unacceptable under the standards of reasonableness and fairness (Article 6:248(2) BW).

An exit can also have tax consequences, for example on the gain you realise. Law & More does not give tax advice; involve a tax adviser at an early stage.

Do you remain liable after you leave?

Yes, for obligations that arose while you were a partner. This is the most underestimated risk of leaving a VOF.

Under Article 18 WvK, each partner is liable for the full amount of the partnership’s debts, not just a share. That liability does not end when you leave. A creditor can still hold you liable years later for a claim that originated during your time as a partner, within the limitation period.

Long-term contracts deserve special attention. If the VOF concluded a lease or a bank loan while you were a partner, you may remain liable for payments that fall due after your exit. The safest way to end that risk is a written release from the creditor. Your withdrawal alone, or an internal agreement with your former partners, does not bind the creditor. Such an internal agreement can, however, give you a right of recourse against the remaining partners.

Why must you register your exit in the trade register?

Because otherwise you can also be held liable for new debts. Third parties may rely on what the Chamber of Commerce (KvK) trade register says.

Dissolution and changes that are relevant to third parties must be registered (Article 31 WvK). Under Article 25 of the Trade Register Act (Handelsregisterwet 2007), a fact that should have been registered but was not cannot be invoked against a third party, unless you prove that the third party knew about it. As long as you are still registered as a partner, a creditor who contracts with the VOF can therefore hold you liable. Have your exit registered on the day it takes effect.

Which documents do you need?

In an exit dispute, documents decide the outcome. Oral arrangements about the date of your exit or the payment are hard to prove.

Keep at least the following: a written notice of termination, preferably sent by registered post and email; proof that your exit was registered with the KvK; a signed exit balance sheet or settlement agreement; and written releases from the main creditors. Also record who takes over which contracts, customers and assets.

How do you prepare a sound exit?

The best exit is arranged in the partnership agreement before any conflict arises. If you are already in the middle of an exit, make written agreements on every point before you leave.

A robust partnership agreement contains at least a continuation clause, a fixed valuation method, and rules on non-competition and non-solicitation after the exit. When a partner leaves, the parties should agree in writing on the exit date, the payment and its terms, the transfer of contracts and the release from creditors. Where the remaining partners cannot obtain a release, an indemnity from them gives the departing partner at least some protection.

In summary

• A VOF is a partnership under Article 16 WvK; each partner is jointly and severally liable for all its debts (Article 18 WvK).
• Without a continuation clause, the exit of one partner dissolves the whole VOF.
• The exit payment follows the partnership agreement; without it, an expert usually values capital, hidden reserves and goodwill.
• You remain liable for debts from your time as a partner unless the creditor releases you.
• Register your exit with the KvK straight away to avoid liability for new debts.

Frequently asked questions about leaving a VOF

Law & More advises departing and remaining partners on VOF exits and partnership agreements. Unsure where you stand? Tell us about your situation. We will let you know your options within one working day.

How Law & More can help you with this is explained on our corporate lawyer page.