Article 2:175 of the Dutch Civil Code (Burgerlijk Wetboek) defines the private limited company (besloten vennootschap met beperkte aansprakelijkheid, BV). It is a legal entity with a capital divided into transferable shares. A shareholder is not personally liable for what is done in the company’s name and does not have to contribute to losses beyond what he must pay up on his shares.
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How is a BV formed?
By one or more persons, through a deed executed before a civil-law notary in the Netherlands. The deed contains the articles of association. The board must register the company in the trade register of the Chamber of Commerce (KvK). Until registration and full payment on the issued shares, directors are jointly and severally liable with the company for legal acts performed on its behalf (Article 2:203).
Is there a minimum capital?
No. Since the Flex-BV reform of 1 October 2012, the minimum capital requirement of 18,000 euros has been abolished. At least one share with voting rights must be held by someone other than the company itself (Article 2:178). Creditor protection now relies on the distribution test in Article 2:216 and on director liability.
How are shares held and transferred?
Shares in a BV are registered shares, recorded in the shareholders’ register kept by the board (Article 2:194). A transfer requires a notarial deed (Article 2:196). By default, a shareholder must first offer his shares to his co-shareholders (Article 2:195), but the articles may provide for an approval scheme or even free transferability. The Flex-BV reform also allowed shares without voting rights or without profit rights.
Is limited liability absolute?
No. Directors can be personally liable, for example for improper management in bankruptcy (Article 2:248), for distributions the company could not afford (Article 2:216) or on the basis of tort. Shareholders who act as de facto policymakers or who take money out of the company can also be held liable.
Frequently asked questions
Do I need a shareholders’ agreement?
Not by law, but if you start a BV with others, it is wise to record arrangements on control, exit and deadlock.
Can a foreigner set up a Dutch BV?
Yes. Nationality and residence are not restricted, but the notary must carry out customer due diligence.
Related terms
- Private limited company (BV)
- Articles of association
- Article 2:216 Dutch Civil Code (distribution test and dividend)
- Article 2:196 Dutch Civil Code (transfer of shares by notarial deed)
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