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 for its debts, and at least one limited partner (commanditair vennoot), who contributes capital, stays out of the management, and risks no more than the amount contributed. The CV is governed by the Commercial Code (Wetboek van Koophandel) and has no legal personality of its own.
What a commanditaire vennootschap is
The CV is a variant of the general partnership (vennootschap onder firma). It is a contract between partners who carry on a business under a common name, with one difference that changes everything: alongside the partners who manage and bear full liability, there are partners who only put in money. Articles 19 to 21 of the Commercial Code contain the whole statutory regime, which is unusually short, so most of what governs a CV in practice comes from the partnership agreement and from case law.
Two structural features follow from that. First, the CV is not a legal person. It cannot itself own registered property, and the partners contract in their own names, although the partnership does have a separate estate (afgescheiden vermogen): the assets contributed to the business serve first to satisfy the creditors of the business, and private creditors of a partner cannot reach them ahead of business creditors. Second, because the statute says so little, the drafting of the partnership agreement carries the weight that articles of association carry in a BV.
The CV at a glance
| Feature | Position under Dutch law |
|---|---|
| Partners | At least one managing partner and at least one limited partner. |
| Liability of the managing partner | Unlimited and personal, jointly and severally with any other managing partners, for all debts of the partnership. |
| Liability of the limited partner | Limited to the agreed contribution, provided the partner respects the prohibition on management. |
| Management | Reserved to the managing partners; the limited partner may not perform acts of management or work in the business. |
| Legal personality | None. The partnership does have a separate estate for the benefit of business creditors. |
| Formation | No notarial deed required; a written partnership agreement is essential in practice. |
| Registration | Compulsory registration in the trade register of the Chamber of Commerce (Kamer van Koophandel), together with the ultimate beneficial owners. |
The two roles: managing partner and limited partner
The division between the two types of partner is not a matter of internal preference. It is the condition on which the limited partner keeps limited liability, and it is enforced against the limited partner rather than against the business.
The managing partner
The managing partner runs the business, binds the partnership towards third parties, and is registered by name in the trade register. In exchange for that authority the managing partner is personally liable for the whole of the partnership debts; where there is more than one, each is liable for the whole. Creditors who cannot recover from the business estate can recover from the private assets of any managing partner.
Because that exposure is unqualified, managing partners frequently interpose a private limited company (BV) as the managing partner. The BV is then the partner with unlimited liability, and the entrepreneur behind it is exposed only as a director of the BV, subject to the ordinary rules on directors liability. This is a common and legitimate structure, and it is worth setting up before the business starts trading rather than afterwards.
The limited partner
The limited partner contributes capital, in money or in assets, and shares in the profit on the terms of the partnership agreement. The name of a limited partner is not entered in the public trade register; only the number of limited partners and the total amount of their contributions is recorded. That relative privacy is one of the practical reasons investors choose the form.
The contribution is the ceiling on the risk, but only for as long as the limited partner behaves as an investor. The limited partner has no authority to represent the partnership, cannot sign contracts for it, and cannot take part in its management. Internal rights are a different matter: the partnership agreement can give limited partners a vote on defined internal decisions, such as adopting the accounts, admitting a new partner or approving a transaction outside the ordinary course. What matters is that nothing the limited partner does looks, from the outside, like running the business.
Comparing the two roles
| Aspect | Managing partner (beherend vennoot) | Limited partner (commanditair vennoot) |
|---|---|---|
| Liability | Unlimited and personal for all debts of the partnership | Limited to the agreed contribution, unless the prohibition on management is breached |
| Authority | Manages the business and represents it towards third parties | No authority to represent; internal voting rights only if agreed |
| Trade register | Registered by name, with personal details | Not named; only the number of limited partners and the total contribution |
| Contribution | Capital, assets or work | Capital or assets; contributing labour would breach the prohibition on management |
The prohibition on management and what a breach costs
Article 20 of the Commercial Code forbids the limited partner from performing acts of management and from working in the business of the partnership, and it forbids the name of a limited partner from being used in the name of the firm. Article 21 attaches the sanction: a limited partner who breaches those rules becomes jointly and severally liable for all the debts of the partnership. The sanction is severe because the rule protects third parties, who deal with the business on the footing that the people who appear to run it are the people who stand behind it.
In practice the line is crossed by conduct that looks unremarkable at the time: negotiating with a supplier, signing a contract or an order, appearing at a client meeting as the person who decides, giving instructions to staff, or being held out on a website or in correspondence as a director of the business. It is not necessary that the limited partner intended to manage; it is enough that the acts were acts of management or that the partner allowed an impression of authority to arise.
The Supreme Court has tempered the sanction: the joint and several liability of article 21 is not automatic in every case, and a court must consider whether the consequence is proportionate to the nature and gravity of the breach and to the circumstances, including whether third parties were actually misled.
That proportionality test is a defence, not a licence. The safe course for a limited partner who wants a real say is to write the influence into the partnership agreement as an internal approval right, and to keep every external act in the hands of the managing partner. The safe course for the managing partner is to make sure the limited partners never appear in the outward-facing documentation of the business.
Setting up a CV in the Netherlands
Forming a CV requires no notarial deed and no minimum capital, which makes it quick to set up and easy to get wrong. Three things need attention.
The partnership agreement
The statute regulates almost nothing about the internal relationship, so whatever the partners do not agree is left to the general law of partnership and to the courts. A workable CV agreement deals at least with the contribution of each partner and how it is valued, the division of profit and of loss, which decisions the managing partner may take alone and which require approval, the information the limited partners receive and when, what happens when a partner dies, withdraws, becomes incapacitated or goes bankrupt, how a partner interest is valued on exit, whether new partners may be admitted and on what terms, and how the partnership is wound up. Add a clear statement that the limited partners have no authority to represent the partnership, both as an internal instruction and as evidence of the arrangement.
Registration in the trade register
Every CV must be registered with the Chamber of Commerce before or at the start of its activities. The registration records the name, the address, the activities, and the personal details of each managing partner; for the limited partners it records only their number and the total of their contributions. Changes must be notified. Registration is what makes the partnership visible to third parties, and a failure to register or to update the register can expose partners to liability towards those who relied on the register. 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 Chamber of Commerce. A UBO is, in principle, a natural person who holds more than a quarter of the ownership interest or of the votes, or who otherwise exercises ultimate control; where no such person can be identified, senior managing officials are registered instead. The register implements the European anti-money laundering framework. Since the Court of Justice of the European Union ruled that general public access to UBO data was disproportionate, the Dutch register is no longer open to the public: access is restricted to competent authorities, the Financial Intelligence Unit, institutions carrying out client due diligence, and parties who can demonstrate a legitimate interest. The obligation to register, and to keep the registration current, is unaffected.
Advantages and risks of the CV
The CV earns its place where capital and management need to be separated and the parties want a light structure. Its weaknesses are the mirror image of that.
What the structure does well
- Capital without loss of control. The managing partner can raise money from several investors and still decide everything about the business, which is not possible in a BV without giving away shares and, with them, influence.
- A light and flexible framework. No notary, no minimum capital, no statutory governance model, and a partnership agreement that can be tailored to the deal.
- Protected and discreet investors. The limited partner risks only the contribution and is not named in the public register.
- A separate estate. Business creditors have first recourse to the assets contributed to the partnership, which gives the arrangement more substance than a loan.
What goes wrong
- Unlimited liability of the managing partner. This is the central risk and it is not capable of being limited by agreement between the partners; only the choice of a BV as managing partner changes the exposure.
- The management prohibition. Investors who want to be involved frequently drift over the line, and the resulting joint and several liability is exactly what they joined the structure to avoid.
- Thin statutory rules. Where the agreement is silent the partners are left to argue, and disputes about profit shares, exit values and decision-making paralyse small partnerships more often than external events do.
- Continuity. A CV cannot exist without a managing partner, and the departure, death or bankruptcy of the only managing partner leads to dissolution unless the agreement provides for succession.
On the fiscal side one change is worth knowing about. Until the end of 2024 Dutch law distinguished between the closed CV and the open CV, the latter being subject to corporation tax in its own right. That distinction was abolished with effect from 1 January 2025, so a CV is now in principle fiscally transparent and the profit is attributed to the partners. How each partner is taxed on that share depends on individual circumstances, and it is a question for a tax adviser rather than for a law firm; we set out the legal structure and leave the fiscal treatment to the specialists.
Ending a CV
A partnership ends on the ground stated in the agreement, on the expiry of the agreed term, by the resolution of the partners, or by the death, withdrawal, incapacity or bankruptcy of a partner where the agreement does not provide otherwise. The withdrawal of the only managing partner is the classic breaking point, because the partnership cannot continue without one. What follows is a liquidation: the business is wound up, the creditors are paid from the partnership estate, and only what remains is distributed among the partners according to the agreed ratio. A managing partner who leaves does not shed liability for debts that arose while a partner, and a partner who joins an existing CV as managing partner takes on liability for the existing debts of the partnership as well. Both points belong in the agreement and in the due diligence before anyone signs.
Where the partners conclude that the exposure of the managing partner is too great for the business they actually run, converting to a private limited company is a realistic alternative; our guide on the legal steps from idea to BV sets out what that involves.
Where the CV is used
Three settings account for most Dutch limited partnerships.
Investment funds. Real estate, private equity and venture capital funds use the CV because it maps exactly onto the fund model: the manager is the managing partner and the investors are limited partners whose liability is capped and whose identity stays out of the public register. Fund structures of any size also engage financial supervision rules, so the fund manager needs to establish whether a licence or a registration under the financial supervision legislation is required before capital is raised.
Family businesses and succession. A CV allows one family member to continue running the business as managing partner while others participate in the profits as limited partners. It is a way of transferring economic interest gradually without splitting control, and it is often combined with a BV as the managing partner so that no individual carries unlimited liability.
Joint ventures and project vehicles. Where one party brings expertise and execution and another brings funding for a defined project, the CV gives each what it needs without the governance apparatus of a company. The critical drafting points are the exit mechanism and what happens if the project overruns.
Reform: the modernisation of partnership law
Dutch partnership law is old. The provisions on the CV date from the nineteenth century and have been patched by case law rather than rewritten. A draft bill to modernise partnership law has been prepared and went through a public consultation, but it has not been submitted to parliament and no date for its introduction has been set. Nothing in it applies today.
The direction of travel is nonetheless clear from the draft. It would give partnerships legal personality on registration in the trade register, which would allow a partnership to own registered property and to be a party to proceedings in its own name; it would modernise the rules on partners joining and leaving, so that the partnership need not be dissolved every time the membership changes; and it would rework the liability regime, including the position of the limited partner and the consequences of interfering in management. Our article on the modernisation of partnerships bill goes through the proposals. Until it becomes law, the Commercial Code and the partnership agreement remain the only sources that matter.
Common questions about Dutch Limited partnerships
How is a Dutch Limited partnership taxed?
One of the most attractive features of a CV is its tax transparency. This is a simple but powerful concept: the partnership itself doesn’t pay corporate income tax. Instead, all the profits flow straight through to the partners, who then handle the tax on their individual returns.
This setup neatly avoids the “double taxation” problem you often find with a BV (a private limited company), where the company is taxed on its profits, and then shareholders are taxed again on their dividends.
- General Partners are usually seen as entrepreneurs in the eyes of the tax authorities. They pay income tax on their slice of the profits and can often take advantage of various tax deductions available to business owners.
- Limited Partners’ profits are treated differently, depending on how the participation is held. Because the fiscal treatment turns on individual circumstances, a limited partner should have it confirmed by a tax adviser.
Can a limited partner participate in business decisions?
This is a critical point, and the answer is a firm “no”—at least not in any active management role. To keep their liability limited, a limited partner absolutely must remain a passive investor. That means no signing contracts, no representing the company to the outside world, and no getting involved in the day-to-day running of the business.
Now, this doesn’t mean they have zero say. A well-drafted partnership agreement can give limited partners internal voting rights on major decisions, like approving the annual accounts or bringing in a new general partner. The bright line, however, is that they must never perform any act that could be mistaken for active management by an outsider.
The second a limited partner steps over that line and starts acting like a manager, they risk losing their liability protection. If that happens, they could be legally reclassified as a general partner, making them personally responsible for all the partnership’s debts. It’s a costly mistake to make.
What happens if a general Partner leaves the CV?
A Dutch CV cannot legally exist without at least one general partner. So, if your only general partner leaves, retires, or passes away, the partnership is headed for dissolution unless you have a solid succession plan.
This is exactly why a comprehensive partnership agreement isn’t just a nice-to-have; it’s non-negotiable. Your agreement must clearly spell out what happens when a partner leaves. Does another partner have the right to buy them out? Is there a clear process for appointing a new general partner? Without these rules in place, a single departure can throw the entire business into legal and operational chaos.
Is a Limited partnership a good choice for a startup?
It certainly can be, but it’s a very specific tool for a specific job. A CV is a fantastic option for founders who need to raise capital from angel investors or family but don’t want to give away equity or board seats, as they would have to with a BV.
The huge trade-off, of course, is the unlimited personal liability the founder accepts as the general partner. For a high-risk, high-growth startup, that’s a massive gamble. A CV is best suited for startups where the founder requires total control and the operational risks are well understood and manageable. It’s also vital to ensure you’re on top of all transparency regulations, and the UBO register, although no longer open to the public, must still be kept accurate and up to date.
How Law and More can help
A limited partnership is simple to create and easy to build badly. The questions that decide whether it works are the ones that get least attention at the start: who exactly is the managing partner, how the limited partners are kept on the right side of the management prohibition, what the agreement says about profit, exit and succession, and whether the registration in the trade register and the UBO register reflects reality. Our corporate lawyers draft and review CV agreements, set up the structure including a BV as managing partner where that is appropriate, arrange the registrations, and act when a dispute between partners or a claim by a creditor arises. Contact Law and More to discuss whether a CV fits your plans and how it should be documented.
