Which legal structure is best for your business...
depends on your specific situation.
How many risks do you run? Are you starting on your own or with others?
What are your plans for the future and do you have investors?
The legal structure determines your liability, for example.
But also which taxes you have to pay and which tax benefits you can use.
Contrary to popular belief, zzp'er (self-employed professional without staff)...
and freelancer are not legal structures.
They, too, have to choose a legal structure.
The 3 most common choices are: a sole proprietorship for a single owner...
a general partnership for several owners...
and the private limited, which you can set up alone or with others.
The advantages: the sole proprietorship and general partnership are easy to set up.
You simply register your business with KVK.
Also, if your profits are low, you can benefit from tax schemes.
The downside is that you are personally liable...
if your company has debts it cannot pay.
For a private limited, the plus side...
is that you are usually not personally liable.
This legal structure is often chosen when there are investors.
And when you want to trade internationally, the bv has...
a more solid image.
On the downside, registration must be done through a civil-law notary...
and taxes are more complicated, and not always favourable.
Let's hear what these entrepreneurs have chosen.
I started a sole proprietorship and basically that's still what I am.
My accountant gave me that advice then, and still does now, really.
Tax-wise, it's beneficial for us, and of course my profits remain below a certain level.
So for me, the sole proprietorship remains the right choice.
We started as a general partnership, because we think of ourselves as a team.
And after that we made a division, an 80-20 division...
and we just put that in writing.
That's the financial aspect. -Yes, the financial aspect.
But the company really belongs to us both.
The first 2 years, we were a general partnership.
And then we switched to a private limited.
We acted on advice from our accountant and the bank...
to reduce the entrepreneurial risk and the tax pressure.
Getting expert advice pays off.
It wasn't until we started making big money, that we...
"Big money". -You know, I mean more than...
than a nice extra. When you really start making a living from it.
It's good idea to talk to someone about...
Or when you buy a house. You have to factor everything in.
The risks aren't as great...
because with a general partnership, you are personally liable for losses.
And you could let a bv go bust. Of course, that is not what you want.
But you could, and you would not be personally liable.
We really have everything in order in our company. We know what we're doing.
We know how much to set aside, so we're not personally liable.
And that we can cope on our own.
And now it is time for action.
Choose the legal structure that best suits your situation.
If you choose a bv (private limited), have an accountant and notary advise you beforehand.
And you can always change your legal structure at a later date.
Want to know more?
Visit KVK.nl/en/starting