Dissolve a BV in the Netherlands
Jul 1, 2022
If you want to use the quick “turbo liquidation” method, be sure to do that before the rules change.
If you’re a commercial person, you are likely to have multiple enterprises going at the same time. As a rule, some of these work out well, while others don’t. This can be due to a lot of factors, but they are all inherent to entrepreneurship. Dissolving your BV (or terminating or liquidating) instead of letting it linger, can be a good choice. More often than people think. Here we’re going to explain what this involves.
How does it work?
Dissolving your BV in the Netherlands usually goes as a “turbo-liquidation” (yes, this is the formal name). As the word suggests, turbo-liquidation is a quick way to dissolve your BV as opposed to the onerous way of “normal” dissolution of a company. The turbo-liquidation follows a number of steps. First, the shareholders take the decision to dissolve the BV. The BV must then be de-registered at the Dutch Chamber of Commerce. Finally, the BV should also be deregistered with the tax authorities. As a last step you should file your last tax returns and annual accounts.
How do I wrap up the accounts of the BV?
After a dissolution, a BV still has to pay its taxes and submit its final annual accounts. This seems a bit strange. After all, the BV doesn’t exist anymore at this point. But this is perfectly normal. Otherwise, one would only be able to dissolve a BV per the end of each year. This would be very undesirable. That’s where the “keeper of the books” comes in : a former director of the company who is tasked with keeping the books (obviously) but also with finalizing the financial situation of the BV. He (or she) pays the final taxes to the Tax Authorities and files the last annual accounts of the company after it has ceased to exist. At this point, the company bank account may have been terminated as well, so the keeper of the books can use his or her own bank account here. So, there is no need to hold up the dissolution for this.
Are there any risks involved here?
The decision to dissolve the BV is taken by the shareholders, but the board of directors is in the end responsible for the whole process. A business founder usually holds both positions: shareholder and director. Now, if a founder in any way tries to abuse a turbo-liquidation to get rid of business creditors, he or she can be held liable by these creditors in person, in their quality of director of the company. This sounds like a grave risk, but in practice it’s not. In 99.99% of the cases, a turbo-liquidation can be performed to dissolve a BV without any fear of consequence. This is especially the case when the B.V. is completely empty and leaves no creditors behind. If you do leave creditors behind, just make sure you have spent every last penny on paying them back. There’s no law against going broke, and the Dutch legal system very much prefers you taking the turbo-liquidation route as opposed to a regular bankruptcy procedure. If you are that 0.01%, this means you have been trying to defraud your creditors. You will know when you are in that category and the consequences of personal liability will then be yours. It’s as simple as that.
When does mismanagement become fraud?
Financial mismanagement can potentially lead to personal liability of a director, either during or after the existence of the BV. Financial mismanagement includes, for example, the payment of dividend to shareholders while creditors should have been paid first. Another notorious example is “fraudulent conveyance” : the payment of funds to affiliated companies without any real performance to justify this. This has been prohibited in Europe since Roman times, and rightly so. Business decisions that end up badly are not considered fraudulent in this context.
Roadmap
Make sure your BV is empty. If there are debts to third parties, make sure your last funds were spent on paying them off.
Make sure you keep funds aside for paying your last taxes such as VAT, VPB or labour taxes. You can pay these from the company bank account, or from the director’s personal bank account after the dissolution of the company.
If there’s any cash left in the BV at the moment of dissolution, you pay this to the shareholders in dividend.
Complete the dissolution documents. After you have signed and returned the documents, we submit them to the relevant authorities.
Once the liquidation is processed at the Chamber of Commerce, the BV is dissolved. Your nominal share capital can be repaid to the shareholders, tax-free. Transfer this amount as “released nominal share capital”.
Normally, the Chamber of Commerce informs the tax authorities that the BV has been dissolved. Keep an eye on that and inform the Tax Authorities about this if necessary.
Pay the final taxes to the Tax Authorities. Terminate the BV's bank accounts.
Submit the final Annual Accounts of the BV at the Chamber of Commerce.
Recap
A turbo-liquidation is particularly suitable for BV’s in which little has been done and where no potential liabilities exist. If your BVs has been very active, make sure all creditors are paid off before dissolving. But even when there are creditors, a BV can be dissolved when there are simply no means to pay them off. Any debts the BV has to shareholders or directors can be negated of course.
Recommended further reading:
