Private limited company

The private limited company (besloten vennootschap, bv) is suitable for companies that make considerable profit and do not want to be personally liable. The formation requirements are, however, tougher. For example, a notarial deed is necessary for the formation.

Who are involved?

A private limited company has shareholders and staff. The director is employed by the private limited company and acts in the name of the private limited company. The shareholders are the boss. A private limited company does not have to consist of several persons. You can be the only shareholder and the only staff member: the director.

Who has the capital at his/her disposal and is liable?

A private limited company is a company in which the capital is divided into shares. The shares are held by the shareholder/shareholders. In addition, the private limited company is a legal entity with the same legal status, rights and duties as a natural person. The private limited company itself is seen as entrepreneur. Therefore, the shareholder and/or director are not, in principle, personally liable. If you commit fraud or were negligent, you are, of course, personally liable.

Switching from sole proprietorship to private limited company

The sole proprietorship is a great type of enterprise with which to begin. There will come a time when it is advisable to investigate whether you want to convert your company into a private limited company. If you have a private limited company, you are no longer personally liable. In addition, you will pay tax in a different way, which may be cheaper for you. In most cases, this turning point is if you make around € 100,000 or € 150,000 profit.

Directly to:

Sole proprietorship

Examples of the private limited company

The private limited company is used by (performing) artists, architectural firms and other institutions that make a lot of profit, such as musical producers, some venues and film and TV producers. It is therefore cheaper in terms of tax and liability to act on the basis of a private limited company. The fact that the formation requirements are quite tough and more expensive than in the case of a sole proprietorship is less relevant.