You want to start a business together with a business partner, a colleague or your partner. Then you quickly end up with the vennootschap onder firma, vof for short: the Dutch general partnership. According to the KVK (Dutch Chamber of Commerce), you can set up a vof without a notary and register it yourself. That makes the start simple. At the same time, the agreements between the partners matter, because in a vof you are liable with your own money for the debts of the entire business.
Below you can read what a vof is, how to set one up and what belongs in the partnership agreement. After that: liability, who may sign on behalf of the vof, taxes and social security, the choice between vof and bv, leaving or stopping, and the business account for the vof.
Key points:
- The meaning of vof in one sentence: according to the KVK, a business in which at least two people or organisations work together under the same business name.
- You set up a vof without a notary: you register it yourself with the KVK, and no minimum starting amount is needed.
- The vof is not a legal entity. Each partner is liable with their own money for all debts of the vof.
- Each partner pays income tax on their own share of the profit; for VAT, according to the Belastingdienst (Dutch Tax Administration), the vof as a whole is the entrepreneur.
What is a vof?
What is a vof? According to the KVK, a vennootschap onder firma, also written as v.o.f., is a business in which at least two people or organisations work together under the same business name. Every person or organisation taking part is a co-owner; such a co-owner is called a partner (vennoot). Each partner contributes something to the vof. That can be money, but also work or goods, such as machines. The partners share the profit and pay income tax on it.
There is no minimum amount to start: according to Ondernemersplein you do not need starting capital. The vof is a personenvennootschap (partnership), just like the maatschap (professional partnership) and the commanditaire vennootschap (cv, limited partnership). Ondernemersplein reports that the rules for these partnerships are going to change, but it is not yet known when. So keep an eye on the current information from the KVK and Ondernemersplein if you are considering a vof.
The man-vrouwfirma
If you want to start a business with your partner, according to the KVK you can set up a man-vrouwfirma. That is a vof between partners in a relationship; you do not have to be a man and a woman. If the Belastingdienst sees you both as entrepreneurs, you both get the tax benefits for entrepreneurs. On the other hand, you are both liable with your private money. The Belastingdienst also names the unusual partnership (ongebruikelijk samenwerkingsverband): partners have a vof together, while a similar partnership would never occur between people without a (family) relationship. As an example, the Belastingdienst names a vof between a dentist and a dental assistant.
Setting up a vof: how it works
Setting up a vof works without a notary. You register your vof with the KVK yourself, in a few steps as Ondernemersplein and the KVK describe them:
You start the registration of the vof online with the KVK and fill in the form.
You make an appointment at a KVK office to complete the registration. Bring the partnership agreement, if you already have one.
You register the ultimate beneficial owners in the KVK’s UBO register. A vof can have one or more UBOs.
The KVK passes the details on to the Belastingdienst. If the activities fall under VAT, the vof receives the VAT numbers.
The KVK registers the basic details, such as the name of the vof, the activities and the names of the partners. You pay a registration fee for the registration. According to the KVK, a UBO is the owner of an organisation, or someone who can make decisions about it. If you do not want everyone to be able to look up your address, for example because you are being threatened, according to Ondernemersplein you can sometimes shield the visiting address in the Business Register (Handelsregister); you then do register a different postal address, such as a PO box.
The partnership agreement
You lay down agreements between the partners in a partnership agreement (samenwerkingscontract), also called a vof contract. According to the KVK, such a contract is not mandatory but sensible: it prevents misunderstandings. In a vof agreement you include, for example, who the partners are and what they contribute, such as money and labour, how you divide the profit and who may do what on behalf of the vof. Ondernemersplein also names how much money each partner contributes. You can draw up the contract yourself or have a lawyer or notary do it.
Bring the vof contract to your registration appointment. The KVK records part of the agreements in the Business Register, such as the purpose of the vof and the partners’ powers. Anyone doing business with the vof can then see them too. If you do not pass the agreements on, according to the KVK they only apply between you and your fellow partners. If you only draw up the contract later, you can also pass it on later. The KVK also points out that you can take out life insurance on each other, so that the business can continue if one of you dies.
Why is that contract so useful? According to the KVK, the law contains few rules for the vof. So at least include the name of the vof in the contract, the purpose of the business, how long the business will exist or under which conditions it stops, and the partners’ powers. You can divide the profit, for example, in equal shares or based on the number of hours someone works in the business. Partners are not employees, but they can agree on an advance on the profit. Also think about the end: make agreements about a notice period or compensation. By law, a vof stops automatically if one of the partners dies; according to the KVK you can prevent that with an agreement in the contract, such as a takeover clause or a continuation clause.
Liability in a vof
When it comes to the liability of a vof, there is an important difference from a bv. The vof is not a legal entity. According to the Belastingdienst, each partner is liable for all debts of the vof; according to the KVK, this also applies if another partner incurred the debt. A debt is first paid from the vof’s own assets. If that is not enough, according to Ondernemersplein creditors have a claim on the partners’ private assets. According to the KVK, as a partner you are not liable for part of the debt, but for the entire amount. Separate rules apply in a few situations:
| Situation | What applies according to the KVK and Ondernemersplein |
|---|---|
| A partner has private debts | The creditor has no claim on the assets of the vof or on the private assets of the other partners |
| You join an existing vof | You become liable for debts that already existed; you can make agreements about those debts with the other partners |
| You leave the vof | You remain liable for debts incurred while you were a partner |
| You have not yet deregistered | As long as you are in the Business Register, you remain liable for debts that still arise |
| You have a partner | Whether your partner has to contribute depends on how and when you formalised the relationship |
If you join an existing vof, first check its financial situation. You can agree with the other partners, for example, that they pay existing debts if a claim arrives; do put such agreements in a contract. For partners, according to Ondernemersplein you can use a prenuptial agreement or registered partnership agreement (huwelijkse of partnerschapsvoorwaarden) to prevent creditors from reaching your partner’s money.
Who signs on behalf of the vof?
According to Ondernemersplein, every partner has signing authority and may arrange official matters on behalf of the vof, such as signing contracts or reporting a change to the KVK. If you do not draw up a contract, the KVK says, all partners have full signing authority. If a fellow partner buys an expensive car for the vof without consultation, you cannot reverse it. In the vof contract you can agree that above a certain amount you always sign together. You record those powers in the Business Register, so that business partners can check who may sign. If someone else, such as an employee, needs to be able to act on behalf of the vof, you give that person a power of attorney.
Hiring staff with a vof
With a vof you can employ staff. According to the KVK, you then pay social security contributions and payroll taxes for the staff, and you lay down the agreements on employment conditions in a contract or collective agreement (cao). If you hire an employee for the first time, you register as an employer with the Belastingdienst. According to Ondernemersplein, you also report this to the KVK.
In short: in a vof you are liable with your private assets for all debts of the business, including those of your fellow partner. Good agreements in the vof contract and in the Business Register limit the surprises.
Taxes and social security in a vof
Taxes in a vof work at two levels. According to Ondernemersplein, each partner pays income tax themselves on their own share of the remuneration or profit. If a partner meets the requirements for entrepreneurship, according to the Belastingdienst they are an entrepreneur for income tax and can use the schemes for entrepreneurs. If the Belastingdienst sees you as an entrepreneur, you are entitled to the SME profit exemption (mkb-winstvrijstelling); if you also meet the hours criterion, according to Ondernemersplein more tax benefits are added, such as the self-employed deduction (zelfstandigenaftrek).
For VAT, the vof as a whole is the entrepreneur. The Belastingdienst gives the example of a vof with three partners: all three are entrepreneurs for income tax, but the vof is the entrepreneur for VAT. If the vof hires staff, it deals with payroll taxes; with the first employee you register as an employer with the Belastingdienst. Keeping records is a legal obligation. You may do it yourself or outsource it to a bookkeeper or accountant. According to the KVK, a vof does not have to file annual accounts with the KVK.
As a partner you pay contributions for the national insurance schemes, and from your state pension age you receive AOW (state pension). If you are pregnant, according to Ondernemersplein you are entitled to a pregnancy benefit of at least 16 weeks, which you apply for at UWV. As a partner you have no right to a Sickness Benefits Act (Ziektewet), WW or WIA benefit. Ondernemersplein therefore recommends taking out disability insurance yourself.
Vof or bv, or a sole proprietorship after all?
Torn between a vof and a bv? According to the KVK, with a vof you usually pay less tax if you do not make much profit. If you do make a lot of profit, the tax rates for a bv may be lower. The annual costs for a bv are higher than for a vof, and with a bv your private assets are often better protected. The advantages and disadvantages of a vof at a glance, according to the KVK and Ondernemersplein:
According to the KVK, you may always change your legal form. For example, you can convert a vof into a bv, or into an eenmanszaak (sole proprietorship) if your fellow partner stops. What suits you best depends on your profit, risks and plans. The legal-form decision aid on the KVK website helps with that choice.
Good to know: according to the KVK, with a vof you usually pay less tax at a lower profit and the annual costs are lower, but with a bv your private assets are often better protected.
Leaving, dissolving or closing
You can leave a vof yourself while the other partners continue. That is called withdrawing (uittreden). You give notice to each fellow partner, and according to the KVK it is sensible to do so in writing. The main rule is that the vof stops when a partner leaves and is deregistered, and that the assets are divided, unless the partnership agreement provides otherwise. It usually contains a continuation clause that lets the other partners carry on. If the legal form changes in the process, the new business gets a new KVK number. According to the KVK, the vof draws up a final balance sheet with the actual values at the moment of stopping; you pay income tax on the cessation profit that becomes visible. If the vof has financing or credit, inform the lender too.
The KVK points out that you remain liable for debts incurred while you were still a partner. Agreements with your fellow partner about those debts only apply between the two of you: creditors outside the vof can still hold you to account. If you want to close the vof because the business stops completely, you deregister the vof with the KVK. The KVK passes the deregistration on to the Belastingdienst. You may then have to pay tax on the cessation profit (stakingswinst): it arises if the goods on the balance sheet are worth more than their book value, or if the business is sold for more than the books show. Do not forget to deregister, because as long as you are in the Business Register, according to Ondernemersplein you remain liable for debts that still arise.
A business account for the vof
At Vivid, the vof, the maatschap and the cv are in the list of legal forms used to apply for a business account. A separate business account for the vof keeps the partnership’s money separate from the partners’ private money. What the account offers:
Vivid in short: a business account with a Dutch IBAN for the vof, maatschap or cv, with sub-accounts and invoicing, applied for online, usually in about 10 minutes.
Starting together, one account
Apply online for a business account with a Dutch IBAN for your vof.
Frequently asked questions
What is a vof?
A vennootschap onder firma: a business of two or more partners who run it together under one name and share the profit. What is a vof legally? Not a legal entity, and the partners are liable with their own money.
Do you need a notary for a vof?
No. You register the vof yourself with the KVK: start online and complete the registration at a KVK office.
Is a vof contract mandatory?
No, but according to the KVK it is sensible. Without a contract, for example, all partners have full signing authority.
Are you personally liable in a vof?
Yes. Each partner is liable for all debts of the vof, even if another partner incurred them. The assets of the vof are used first.
How do you pay tax in a vof?
Each partner pays income tax on their own share of the profit. For VAT, the vof as a whole is the entrepreneur.
Which is better: vof or bv?
That depends on your situation. According to the KVK, with a vof you usually pay less tax at a lower profit, while a bv often protects your private assets better and has higher annual costs.
How do you stop a vof?
You deregister the vof with the KVK, which passes the deregistration on to the Belastingdienst. You may pay tax on the cessation profit.
This article provides general information and is not legal or tax advice. The rules mentioned are as published by the KVK, Ondernemersplein and the Belastingdienst, and may change. Vivid’s payment services are provided by Vivid Money S.A., an electronic money institution authorised and regulated by the Commission de Surveillance du Secteur Financier (CSSF) in Luxembourg; its Dutch branch is registered with De Nederlandsche Bank (DNB) as an electronic money institution.
