Company formation services | Pitfalls of company incorporation in the Netherlands
The risks when incorporating a BV can be considered to be low. Still, acts on behalf of the BV under incorporation and paying up of shares require attention.
Ratification of acts on behalf of BV under incorporation
In case of any legal acts on behalf of a BV under incorporation it is important to have these ratified by the company after its incorporation by means of a board resolution. Until ratification the person which represented the company under incorporation will remain severally liable for any liabilities related to these acts. This liability remains if the representative knew or should have known at execution of the legal acts that the BV would not be able to fulfil its obligations. This is presumed when the BV will be declared bankrupt within one year after its incorporation.
Pay up shares
It is also advisable to have the capital paid up by the shareholders and have this registered with the trade register as soon as possible. Under Dutch law paying up of shares can be relevant for the following aspects:
- the Dutch participation exemption will not be applicable in case not minimally 5% of the shares have been paid up;
- a Dutch fiscal unity can only be established if 95% or more of the shares have been paid up;
- article 2:216 section 6 Dutch Civil Code (‘DCC’) stipulates that distributions shall be based on the mandatory deposits on the shares and not their nominal value;
- under article 2:199 section 1 DCC the seller remains severally liable against the company for the unpaid amount at transfer of non-paid up shares.
Please contact us in case of any questions in regard the incorporation of a Dutch BV.
RBron - 20:11:37 @ Accounting Services | Netherlands