Limited partnership (CV) in the Netherlands: roles, liability and set-up

A limited partnership in the Netherlands is the commanditaire vennootschap (CV): a partnership with at least one managing partner (beherend vennoot), who runs the business and is personally liable without limit, and at least one limited partner (commanditaire vennoot), who only contributes capital and risks no more than that contribution. The key exception: a limited partner who performs acts of management becomes jointly and severally liable for all the partnership’s debts under Article 21 of the Dutch Commercial Code (Wetboek van Koophandel, WvK).

The CV has no legal personality and is governed by Articles 19 to 21 WvK, so most of its rules come from the partnership agreement. Below we explain the two roles, the prohibition on management, how to set up and end a CV, and when the structure fits.

What is a commanditaire vennootschap?

A CV is a form of the general partnership (vennootschap onder firma, VOF) with one difference: alongside partners who manage and bear full liability, there are partners who only put in money. Article 19 WvK defines it as a partnership between one or more jointly liable partners and one or more partners who act as financiers (geldschieters).

The CV is not a legal person, so the partners act in their own names. It does have a separate estate (afgescheiden vermogen): the assets contributed to the business serve first to pay business creditors, before private creditors of a partner. Because the statute says so little, the partnership agreement carries the weight that articles of association carry in a private limited company (BV).

What do the managing partner and the limited partner do?

The managing partner runs and represents the business and carries unlimited liability; the limited partner invests and stays out of management. That division is the condition on which the limited partner keeps limited liability.

The managing partner

The managing partner binds the partnership towards third parties and is registered by name in the trade register. If there are several, each is liable for all partnership debts, and creditors who cannot recover from the business estate can turn to the private assets of any managing partner.

Because that exposure cannot be limited by agreement between the partners, a BV is often appointed as managing partner. The BV then carries the unlimited liability, and the entrepreneur behind it is exposed only as a director, under the ordinary rules on directors’ liability. Set this up before the business starts trading.

The limited partner

The limited partner contributes money or assets and shares in the profit as agreed. Under Article 20(3) WvK the limited partner bears losses only up to the amount contributed or still to be contributed, and never has to repay profits received. The trade register shows only the number of limited partners and the total of their contributions, not their names.

The limited partner may not represent the partnership or sign contracts for it. The partnership agreement can, however, give limited partners internal voting rights, for example on adopting the accounts, admitting a new partner or approving unusual transactions.

What happens if a limited partner takes part in management?

Under Article 20 WvK the limited partner may not perform any act of management or work in the business, not even under a power of attorney, and his name may not be used in the firm name. Under Article 21 WvK a limited partner who breaches either rule becomes jointly and severally liable for all debts and obligations of the partnership.

The line is often crossed by ordinary-looking conduct: negotiating with a supplier, signing an order, appearing at a client meeting as the decision-maker, instructing staff, or being presented on a website as director. The rule protects third parties, who assume that the people who appear to run the business are the ones who stand behind it.

The safe course for a limited partner who wants influence is to write it into the partnership agreement as an internal approval right and leave every external act to the managing partner. The managing partner should make sure limited partners never appear in outward-facing documents.

How do you set up a CV in the Netherlands?

You need a partnership agreement and a registration with the KVK; no notary and no minimum capital are required. That makes a CV quick to set up and easy to get wrong.

The partnership agreement

Whatever the partners do not agree is left to the general rules on partnerships and to the courts. A workable CV agreement covers at least:

• each partner’s contribution and how it is valued;
• the division of profit and loss;
• which decisions the managing partner takes alone and which need approval;
• the information limited partners receive and when;
• what happens on death, withdrawal, incapacity or bankruptcy of a partner, and how an interest is valued on exit;
• admission of new partners and winding up;
• a clear statement that limited partners have no authority to represent the partnership.

Registration in the trade register

Every CV must be registered with the KVK before or when it starts its activities. The register records the name, address, activities and the details of each managing partner, and for limited partners only their number and total contributions. Changes must be reported; partners who fail to register or update the register can be held to what third parties relied on. Our guide to the business register in the Netherlands sets out the procedure.

UBO registration

A CV must also register its ultimate beneficial owners (UBOs) in the UBO register kept by the KVK. A UBO is in principle a natural person with more than 25% of the ownership interest or votes, or who otherwise has ultimate control; if there is none, senior managing officials are registered. Since the Court of Justice of the European Union ruled in 2022 that general public access to UBO data was disproportionate, the Dutch register is no longer open to the public, but the duty to register and keep the data current remains.

What are the advantages and risks of a CV?

The CV works well where capital and management must be separated and the parties want a light structure. Its weaknesses are the other side of the same features.

• Advantage: the managing partner can raise capital from several investors without giving away control, as would happen with shares in a BV.
• Advantage: no notary, no minimum capital and a fully tailored agreement.
• Advantage: limited partners risk only their contribution and are not named in the public register.
• Risk: the managing partner’s unlimited liability, which only a BV as managing partner can contain.
• Risk: investors who become involved drift over the management line and lose their limited liability under Article 21 WvK.
• Risk: thin statutory rules, so disputes about profit shares, exit values and decisions arise where the agreement is silent.

For tax purposes, the distinction between the closed and the open CV was abolished as of 1 January 2025; a CV is now in principle transparent, and the profit is taxed with the partners. How each partner is taxed depends on individual circumstances and is a question for a tax adviser.

How does a CV end?

A CV ends on a ground in the agreement, when the agreed term expires, by decision of the partners, or by death, withdrawal, incapacity or bankruptcy of a partner if the agreement does not provide otherwise. A CV cannot continue without a managing partner, so the departure of the only managing partner leads to dissolution unless the agreement arranges succession.

Dissolution is followed by liquidation: creditors are paid from the partnership estate and the remainder is divided according to the agreed ratio. A departing managing partner remains liable for debts that arose while he was a partner. If the exposure of the managing partner is too great, converting to a BV is a realistic alternative; our guide on the legal steps from idea to BV explains what that involves.

Where is the CV used in practice?

Three settings account for most Dutch CVs, each with its own drafting points.

• Investment funds: the fund manager is managing partner and investors are limited partners. Before raising capital, the manager must check whether a licence or registration is needed under the Financial Supervision Act (Wet op het financieel toezicht, Wft).
• Family businesses: one family member runs the business as managing partner, often through a BV, while others share in the profit as limited partners.
• Joint ventures and project vehicles: one party brings expertise and the other funding; the exit mechanism and cost overruns are the critical clauses.

Will Dutch partnership law change?

A bill to modernise partnership law has been prepared, but it is not in force and no date has been set. The current rules in Articles 19 to 21 WvK date largely from 1838 and still apply.

The draft would give partnerships legal personality on registration, allow partners to join and leave without dissolving the partnership, and revise the liability regime, including the position of the limited partner. Our article on the modernisation of partnerships bill discusses the proposals.

What should you check as a managing partner?

• Decide whether a BV should act as managing partner before the CV starts trading.
• Make sure the agreement sets out which decisions you take alone and which need limited partners’ approval.
• Keep limited partners out of contracts, client meetings, staff instructions and the website.
• Register the CV and the UBOs with the KVK and report every change.
• Arrange succession, so that your departure, death or bankruptcy does not dissolve the CV.

What should you check as a limited partner?

• Confirm that your liability is limited to the agreed contribution under Article 20(3) WvK.
• Have your influence written into the agreement as internal approval rights, not as authority to act.
• Never sign, negotiate or present yourself as manager, not even with a power of attorney (Article 20(2) WvK).
• Check that your name is not used in the firm name or on business documents.
• Agree on information rights, profit share and how your interest is valued when you leave.

What can we do for you with a limited partnership?

Our corporate lawyers advise managing and limited partners on CV structures:

• We draft or review the CV agreement, including profit, exit and succession clauses.
• We set up the structure with a BV as managing partner where appropriate.
• We arrange the registration of the CV and its UBOs with the KVK.
• We assess whether a limited partner’s conduct risks liability under Article 21 WvK.
• We act in disputes between partners and against creditor claims.
• We guide the dissolution of a CV or its conversion into a BV.

Summary

• A CV has at least one managing partner with unlimited liability and at least one limited partner whose risk is limited to the contribution.
• The CV has no legal personality and is governed mainly by the partnership agreement and Articles 19 to 21 WvK.
• A limited partner who manages or works in the business becomes jointly and severally liable for all debts (Article 21 WvK).
• Registration of the CV and its UBOs with the KVK is compulsory.
• A BV as managing partner contains the unlimited liability; arrange succession in the agreement.

Frequently asked questions