This post provides you an update on the latest notarial requirements when setting up a Dutch BV.
PLEASE NOTE, that during the Corona situation our notaries have become more flexible in the remote formation process and identification of the stakeholders. You find more information on the remote formation of the Dutch BV in this post.
A BV is established by one or more individuals or companies that sign the deed of incorporation (akte van oprichting) before a Dutch civil law notary.
The articles of incorporation should include the company's articles of association, which state the company's official name, objectives and the registered office, which is required to be in the Netherlands (the registered office need not necessarily be the company's principal place of business). The articles of incorporation should be in the Dutch language. This also applies to the articles of association, as these are a subset of the articles of
incorporation. The civil law notary is completely responsible for ensuring that the articles of association comply with relevant legislation.
An incorporator can be present at the signing of the articles of incorporation or can be represented by a power of attorney given to his representative or by acting through a [nominee].
There are no requirements for the incorporator with respect to his nationality or residency. Payment of capital may be made in cash or in kind.
For payment in kind there is the formal requirement that a description of the contribution has to be drawn-up. It is the responsibility of the board of directors to be certain that the received payment in kind represents (reasonably) the same value as the shares that have been issued.
When the deed of incorporation is executed before the civil law notary, the new BV comes into existence as a legal entity with full rights. The incorporator(s) then complete(s) the incorporation process by registering the new company with the trade register at the Chamber of Commerce. At this time, the total cost of incorporation must be disclosed. The registration will have to be accompanied by specific information, which includes:
A copy of the articles of association, showing the entity's name, its business objectives and address;
A statement of issued and paid-in share capital must be filed. All changes in issued and paid-in capital will be filed including the name and address of the sole shareholder (if applicable), the number of shares issued by the BV and if there are shares not fully paid-up, the name and address of the holder of these shares have to be filed together with the amount which is already paid up;
An overview of names, addresses and other details of all members of the supervisory board (if applicable) and the board of directors. If the company only has one shareholder, which could be either an individual or a legal entity, then the name and address/office registration of this sole shareholder must be disclosed;
A description of each managing director's authority to represent and bind the company. For example, in case there are two or more of such directors, whether one may act alone or only in combination with the other.
The formalities required for incorporation usually take about two to four working days. In the meantime, a company is allowed to function on a provisional basis, but must signify this by adding the initials i.o. (for 'in oprichting' which means 'formation in progress') to the initials BV after its name. During the pre-incorporation period, the BV i.o. must be
registered with the trade register at the Chamber of Commerce, if it intends to conduct any business prior to incorporation. The executives acting on behalf of the BV i.o. are personally liable until the formalities concerning registration and contribution of capital have been completed and the BV has, either expressly or implicitly, ratified the actions performed on its behalf during the pre-incorporation period.
Articles of association/Formation Deed
These articles set out the mission and objectives of the company and its internal regulations. No separate document containing by-laws is required. Apart from the name, the registered office and the company's objectives, the articles should contain at least the following items, some of which some are prescribed by law while others represent general good practice:
The issued and paid-up capital, by number and nominal value of shares, and the denominated currency of the share capital, including the amount of issued share capital of each type (if there are several types of shares) for each incorporator;
Rules regarding the stipulated restriction on the transfer of shares or the absence thereof. A BV can decide to include a "transfer restriction clauses" (in Dutch: blokkeringsregeling), clauses which prevent the transfer of its shares without for example prior approval by the Board of Directors, or the obligation to follow certain offering system to the other shareholders. If the incorporator (or at a later time the shareholder(s)) wishes to have no transfer restriction on the shares, the absence must be specifically stipulated in the articles of association. If the articles of association do not mention anything about a transfer restriction the law provides the transfer restriction, the shareholder is obliged to offer his shares to his co-shareholder(s), if they do not wish to buy them, the shareholder is free to sell them to a third party.
The powers of the managing director(s) and the procedures which are to be followed if for any reason no managing director(s) are available;
Provisions regarding the supervisory board (only for companies that have such a board);
The date of the financial yearend and rules as to the preparation of financial statements and audits;
Rules for general meetings of shareholders;
Shareholders' voting rights;
The dissolution procedures;
Details of all pre-incorporation agreements that the new company will be required to assume (for example, those concerning the rights of the incorporators or contributions to capital other than in cash).
In the preliminary stages of forming a company, the incorporators must check that its proposed name is not identical to or too closely resembles that of an existing company. This can be done by the civil law notary through the Trade Register online. The name must begin or end with the initials BV or the equivalent words spelled out, but otherwise need not be in Dutch.
Costs of incorporation
The main expenses incurred in forming a company are the civil law notary's fee charged for drawing up and executing the articles of incorporation.
(Additional fees are charged when difficult problems necessitate much correspondence, translation or discussion. If other professional advisors have been engaged, provision for their fees should not be overlooked.)
The notary cost of setting up a BV depends on the notary but will be in the range of EUR 750.
The fee of the Chamber of Commerce charged for filing the company's documents in the trade register. This fee is based on the legal form of the company and its location. Registration with the trade register will cost around EUR 50.