Closing a company in the Netherlands
In the Netherlands, closing down a business has to follow a strict legal procedure. We hereby explain the legal requirements for the company dissolution and liquidation, INCO’s legal service on Company Dissolution and Liquidation, and the procedure of dissolution of your company with INCO.
3. Turbo procedure
If the company does not have any assets or liabilities at the moment of liquidation, the Dutch law allows a turbo procedure:
• The director(s) shall convene a general meeting of shareholders to reach a resolution on dissolving the company. - The company ceases to exist at the very moment of the resolution of the General Meeting of Shareholders to dissolve the company; - A custodian for the corporate books and records of the company shall be appointed; - No liquidator has to be appointed.
• The management board must file the liquidation and deregistration of the company with the Trade Register of the Chamber of Commerce.
• The corporate books and records will remain stored with the custodian for a period of seven years.
• Procedure selection: - From our extensive experience, the most commonly used procedure is the turbo procedure; - However, please keep in mind that in daily practice the dissolution and liquidation of a BV may become burdensome and time-consuming, in particular, if the financial position of the company is not clear at the moment of liquidation or if there are more shareholders which are entitled to a stake in the company’s assets/liabilities; - Also the tax aspects of the liquidation may be a complicating factor.
• Employment matters: - If the company has employees in the Netherlands, all employment contracts should be terminated; - You will have to apply for a dismissal permit from the Employee Insurance Agency and notify the tax authority about the employee dismissal. All work permits issued through a company are no longer valid after the company is terminated.
• Individual deregistration: - If a foreign director or shareholder plans to leave the Netherlands after the company is closed down, then the foreign director or shareholder needs to deregister himself/herself with the local authority; - The local authority will remove the person’s name from the Persons Database (“Basisregisratie
Personen”) and inform other government bodies about the departure.
INCO’s company dissolution service
We have advised many clients on possible scenarios for the dissolution of a Dutch BV and have assisted them with the actual dissolution and liquidation.
The services include:
• Advice on tax implications of a liquidation;
• Coordinate the liquidation procedure;
• Arrange for deregistration;
• Take care of final tax compliance;
• Filing final tax returns.
Our package fee for the Company Dissolution and Liquidation service is €1250 (ex VAT, if applicable).
The Dutch law provides three possible procedures for the dissolution of a Dutch BV.
1. Standard procedure
• The director(s) shall convene a general meeting of shareholders to reach a resolution on dissolving the company and liquidating the assets and liabilities of the company. - In the same shareholder's resolution, the directors are dismissed, the liquidator(s) is appointed, and a custodian for the corporate books and records of the company is appointed; - It is common that in the same resolution the former directors are discharged from their corporate liabilities; - In the event that the company has a supervisory board, this body should approve the shareholders' resolution to dissolve the company; - As from the moment of the dissolution, the Dutch words “in liquidating” should be added to all publications, letters, and announcements of or by the company.
• The liquidator(s) shall prepare a final account of the liquidation (and a plan of distribution, if needed). - If there is only one shareholder, a final account of the liquidation (“rekening en verantwoording”) is sufficient; - If there are multiple shareholders, a plan of distribution (“plan van verdeling”) is also needed. The plan of distribution describes the way the company's assets and liabilities are divided between the parties entitled; - The final account and the plan of distribution must be deposited at the registered office of the company if such office still exists.
• Deregistration has to be filed with the Trade Register of the Chamber of Commerce. - The resolution to Dissolution and Liquidation, and the final account (and the plan of distribution, if needed) must be registered with the Trade Register; - The deregistration form can be sent by post or hand-delivered in person; - Although English-language forms are available, they have to be filled in in Dutch; - The Trade Register will pass on your notification of deregistration to the tax authorities. You might need to settle with the Dutch Tax and Customs Administration fiscally.
• The liquidator(s) must publish a notice in a nationally distributed daily newspaper. - The notice shall state where the final account and the plan of distribution have been deposited for public inspection; - Upon publication of such notice in the newspaper a two-month waiting period commences, during which any interested party may institute opposition against the final account and/or the plan of distribution; - After expiration of the two-month waiting period, the actual distribution of the liquidation proceeds may take place, unless objections were raised.
• The company will cease to exist after all assets are known to the liquidator(s) that have been distributed. - The liquidator(s) shall terminate all running contracts and cancel all permits, business insurances, domain name registration, telephone numbers, and all other subscriptions; - The Trade Register must be notified of the termination of the liquidation procedure and of the name and address of the custodian of the corporate books and records; - The whole dissolution procedure takes around 3 months; - After the liquidation has been completed, if it appears that there still remains an asset to be liquidated, or that a creditor or beneficiary has not yet been taken into account, then the liquidation may be "reopened" by a decision of the Court. In such a case, the company "revives", but solely for the purpose of re-liquidating the balance. If the beneficiaries have received too many assets, the liquidator(s) is authorized to reclaim the balance already distributed.
• Upon termination of the company, the corporate books and records must remain stored with the appointed custodian for a period of seven years.
2. Accelerated procedure
With prior approval from the appropriate district court, the dissolution procedure can be accelerated through a “distribution in advance”.
An accelerated procedure is warranted only if,
(1) The liquidator(s) can demonstrate that all creditors are known to him, (2) The beneficiaries of the final balance of the company are few in number, and (3) All the beneficiaries ensure, for instance by way of a guarantee, that they will restitute part of the distribution in advance if a creditor still comes up or opposition is still successfully instituted.
In an accelerated procedure:
• The director(s) shall convene a general meeting of shareholders to reach a resolution on dissolving the company, and appoint the liquidator(s) and a custodian for the corporate books and records of the company;
• The liquidator(s) still needs to prepare a final accounting of the liquidation (and the plan of distribution, if needed), even nothing remains to be liquidated;
• Deregistration has to be filed with the Trade Register of the Chamber of Commerce;
• Upon the settlement of all the then known debts of the company, the liquidator(s) distributes the remaining assets of the company among the beneficiaries in advance;
• The company will cease to exist after all assets are known to the liquidator(s) have been distributed;
• The liquidator(s) must publish a notice about the dissolution in a nationally distributed daily newspaper;
• If an unknown creditor comes up or any opposition is instituted during the two months' period following the publication, the assets distributed in advance may have to be (partly or wholly) recovered to result in a redistribution of assets. If recovery is impossible and some creditor(s) remain unsatisfied, the liquidator(s) will be personally liable for the loss thus incurred;
• The corporate books and records will remain stored with the appointed custodian for a period of seven years.
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