Closing a BV company - How does BV dissolution work?
Dissolving the BV company
There are a few steps you need to take in order to dissolve a BV company. The first step is to call a meeting of all the shareholders and inform them of your decision to dissolve the company. In order to dissolve the company, you will need to get a majority vote from the shareholders in favour of dissolution. Once the shareholders have voted in favour of dissolution, you will need to file a formal request with the Dutch Chamber of Commerce (Kamer van Koophandel). The Kamer van Koophandel will review your request and if all requirements are met, they will approve the dissolution and issue a certificate of dissolution.
Why would you dissolve a BV?
There are a few reasons why you might decide to dissolve a BV company. One reason might be that the company is no longer profitable and it is not worth continuing to operate. Another reason might be that the company is experiencing financial difficulties and is unable to pay its debts. Dissolving the company can be a way to liquidate its assets and pay off its debts. Finally, it might also be necessary to dissolve a BV company in order to comply with Dutch law. For example, if the company is inactive for a certain period of time or if it fails to file annual reports, it may be required to dissolve the company.
Checklist to ending your BV company
1. Agree with all shareholders
First of all, the Whether the shareholders (if more than 1) have made agreements in person, in the company's deed or in a written shareholders' agreement, the most important thing is that there is agreement among the shareholders to dissolve the BV and end the business.
2. Complete the financials
In this stage you will need to 'clean up' the company to make it empty. In order to do that right, follow the following steps.
Get rid of the company's assets
In order to dissolve your BV, it can no longer have any assets (income) such as stocks and business assets in its books. Check therefore what assets the company still has. The most common assets are:
- capital in the bank account
- IP rights
- cars and machines
If there is any money left in the bank account after the dissolution and liquidation of the private limited company, it will in principle go to the shareholders. Unless there is a different agreement in the articles of association.
Furthermore, pay off all your loans and end leases. Most importantly, come to an agreement with your creditors.
Cancel also all other agreements and obligations the company has entered into. A few examples are:
- business insurance
- business licences
- telephone numbers and voip
- domain names
- business bank accounts and credit cards.
- contracts with third parties, employees etc. If you are forced to fire employees, there are special rules you need to follow.
3. Dissolve the BV
To quit your bv, you must have it dissolved. Report the dissolution of your bv to the chamber of commerce via the form 'Dissolution, company, legal entity or partnership'. This is also known as liquidation. The General Meeting of Shareholders takes a formal decision on this. The bv stops when you and any shareholders agree on this decision. You can also choose a future time to wind up the bv.
Turboliquidation is a quick way to dissolve your BV if there are no assets left. You then no longer have any assets in the BV (income). All you need is a dissolution resolution from the General Meeting of Shareholders. Through this resolution, the legal entity (the bv) immediately ceases to exist.
Turbo liquidation is not without risk. A creditor can demand payment through the courts (liquidation) if it turns out afterwards that there are still debts. As a result, shareholders are now personally liable because the legal entity has been dissolved.
4. De-register the BV from the chamber of commerce
After dissolving the BV, the company needs to de-registered from the chamber of commerce (KvK) registrar. This is done by filling in a form.
5. Settle for corporation tax and VAT.
At this stage, the company will receive communication from the tax authorities to perform a final VAT and corporate income tax return.
After following these steps, your company is dissolved, de-registered and settled for taxes. The only thing you will have to do now is keeping your administration for at least 7 years!
Questions about company formation in the Netherlands?
Let's discuss for example how to register a BV or other entity in the Netherlands and which contracts you need to have to be legally compliant.
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