Legal structure advice
Starting a business or ready for a BV or holding company? With personal legal-structure advice, we help you choose the optimal legal structure. This limits risk, prevents overpaying tax, and ensures your incorporation is arranged properly right away with the KVK and the notary. Choose our Advisory sessions for choosing your legal form for 1-on-1 guidance.
What is a legal form?
The legal form is the legal shell of your business. It determines who is liable for debts, how you pay taxes and how decisions are made. Common forms are sole proprietorship, general partnership (VOF), limited partnership (CV) and private limited company (BV). Freelancer or zzp is not a legal form; as a zzp'er you usually choose a sole proprietorship or BV. The right choice depends on your risk, profit expectations and whether you operate alone or together. Are you a zzp'er and unsure between a sole proprietorship or BV? See our Support for freelancers/sole proprietors.
Which legal form suits you?
In practice, the choice revolves around three pillars: liability, taxes and your plans for growth or collaboration.
Liability and risk
In legal forms without legal personality, such as a sole proprietorship and VOF, you are personally liable. If things go wrong, your personal assets can also be seized. In a VOF you are moreover jointly and severally liable for all debts of the VOF. If you choose a BV, in principle the BV is liable and your private assets remain out of reach. Do note exceptions, such as directors’ liability in case of mismanagement or personally providing security. If you work with partners, record agreements in a VOF agreement or shareholders’ agreement to clearly arrange risks and control.
Tax impact and break-even point
For tax purposes, a sole proprietorship is taxed through personal income tax. Startup and self-employed deductions and the SME profit exemption lower your tax burden, especially at lower and mid-range profits. A BV pays corporate income tax on its profit. As a DGA (director-major shareholder), you receive a salary that complies with the customary salary rules and you can distribute profit after tax as dividend, on which you then pay box 2 tax. Because of this two-layer structure, a BV can be advantageous at higher, stable profits, especially if you don’t need all profit privately and can retain it in the BV or holding company. In practice, the tax break-even point is often around a structural profit of approximately 120,000 to 175,000 euros per year, but the actual benefit depends on your situation, investments and private withdrawals. We calculate multiple scenarios for you, including DGA salary, dividend strategy and options with a holding company for risk diversification and future growth or sale. Read more about the Tax impact per legal form.
How Profinancials helps with your legal form
- Free intake and quick scan: we map out risk, profit expectations and future plans.
- Scenario comparison: calculations for sole proprietorship, VOF and BV structures on tax, liability and cash flow.
- Set-up and incorporation: guidance with KVK registration, arrangements with the notary, articles of association and shareholders’ agreement. If needed, we set up a holding company immediately.
- Ongoing optimization: advice on DGA salary, dividends, management fees and tax deductions, plus income tax (IB) and corporate income tax (VPB) filings throughout the year.
You get clear advice, a concrete step-by-step plan and guidance until everything is arranged. Start today with an intake and receive our first recommendations within 24 hours.
Are you an SME entrepreneur or freelancer and want to grow locally? See our Advice for local entrepreneurs.
Coming to the Netherlands as a foreign entrepreneur? Read more about Legal form for foreign entrepreneurs.
Ready to set up your Dutch company?
Contact us today for a free initial consultation. We will show you how we can make your operations in the Netherlands smooth, compliant, and ready for growth.
Contact us
Frequently asked questions
These frequently asked questions provide clarity about what we arrange, how we work, and what you can expect when collaborating with us for your business administration.
The legal form is the legal structure of your business. It determines, among other things, your liability, how you pay taxes and who decides. Examples are the sole proprietorship, VOF, CV and BV.
Common business forms are sole proprietorship, VOF, CV and BV. In addition, there are the NV, foundation and association. Which one fits depends on risk, profit, collaboration and your growth plans.
Choose based on risk, profit level and whether you operate alone or together. Lower and variable results often fit a sole proprietorship. With higher, stable results and more risk, a BV is often appropriate. We calculate this for you.
ZZP is not a legal form. If you work alone, a sole proprietorship or BV is logical. If you work together structurally and share revenue and risk, a VOF may fit. Always seek advice about liability and agreements.