The Dutch General Partnership, also known as VOF, is another type of company established in the Netherlands formed by at least two members, through a contract registered at the Chamber of Commerce (Trade Register). This type of partnership is usually translated into “company with partners”.
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Characteristics of a General Partnership (VOF) in the Netherlands
Each partner must bring something to the respective business, like money, goods, knowledge or labor. Unlike other types of companies opened in Netherlands, for a VOF Company there is no minimum amount of capital required in order to start the company.
Another important aspect of the VOF Company in the Netherlands is that the implicated entities in the business are liable for debts, even if they were created by the other partner involved in the Dutch General Partnership. Therefore, a partnership agreement should be created and signed with a notary.
In regards to taxes, the partnership agreement should be registered at the Chamber of Commerce, and each partner will pay an income tax on their own share of profits, being treated as an independent entrepreneur. In this way, the partners have their own tax allowances and deductions.
This Dutch General partnership agreement must mention the contribution, authority, profit shares and the arrangements for resignation of the profits. The contract also specifies a formula used to calculate how the profits are allocated. This type of contract can be written either by a civil notary or by the partners using a contract model.
Liability for a General Partnership in the Netherlands
When it comes to liability, the VOF partners are jointly and severally liable for the obligations of the VOF, meaning that if the assets owned by this partnership are not sufficient, creditors are entitled to claim the personal assets of the partners.
If the partnership is between husband and wife, then creditors can also claim your spouse’s goods, unless a marriage settlement has been made. In that case, the personal assets of the respective partner fall outside of the area of business.
As for taxes, in a husband-wife business, they can both claim tax allowances, but they will be obligated to perform tasks equally. VAT registration in Netherlands may not be requied for this business form, depending on the activties.
In regards to accounts and records, the law stipulates that any person doing business or having an independent profession has the obligation of keeping accounts and records of their financial position, and to retain books, documents and other data carriers that belong to those accounts and records. Each partner is required to compile a balance sheet and an income statement each year.