Turbo Liquidation Netherlands explained
Oct 16, 2023
What is a turbo liquidation?
A turbo liquidation is a quick way to liquidate a Dutch BV, foundation or other company. The reason why it’s called “turbo” is because the regular liquidation phase is skipped following the dissolution. The most important condition that must be met is: there may be no assets on the company’s balance sheet. Allowing a company to continue to exist without income generally serves no purpose. In fact, it only costs money. Consider, for example, the mandatory VAT returns, AGMs and annual accounts and keeping records; on an annual basis this can easily cost you € 1,000 exc. VAT. In such cases, proceeding to terminate the company can be a logical next step.
How does this dissolution take place in a turbo liquidation?
Simply by means of a resolution by the general meeting (of shareholders). As a result, the company ceases to exist with immediate effect. The liquidation phase, during which assets get liquidated and distributed over creditors, can be skipped because there are no assets to be distributed. This makes a liquidation phase pointless.
What is the advantage of a turbo liquidation?
The advantage of the turbo liquidation is that a single resolution of the General Meeting is sufficient. There is no liquidation phase. This means : no need to place an advertisement in a newspaper, no need to wait two months for a creditor to come forward and no deed of non-opposition to be requested at a Dutch court. As a result, a turbo liquidation is many times faster and cheaper than a normal liquidation.
How do I choose between a turbo liquidation and a “regular” liquidation?
The situation dictates your choice. If the Dutch company has assets left on its balance sheet, these need to be liquidated first and distributed over the creditors. In such a case, a regular liquidation is required. If the Dutch company does not own any assets on its balance sheet, your only option is a turbo liquidation. Also regular bankruptcies are out of the question, simply because no assets are there to be distributed.