The moment you have decided you would like to incorporate a BV company, you visit a notary. The notary will identify you and provide you with a list of questions to be answered.
The questions start with the name of the company, the aim of the BV company, long first book year or not. One of the questions is the share capital.
How much incorporation capital BV company?
The notary will ask you how much share capital would you like to have. How much will you have? The old rule was that you had to pay in guilders Fl 40.000 before you could start. Then that amount was converted to the euro equivalent of EUR 18.151. The Government switched that to EUR 18.000. Now with the so called flex BV company, the amount can be any amount.
So you can have a EUR 0,01 share capital. Problem is that you are held liable for anything the BV company does until the issued share capital of EUR 0,01 is being paid. So many persons forget to actually transfer the EUR 0,01 to the business bank account of the new BV company. Please pay the price.
How many shares will you issue?
You can issue as many shares as you can think of. But how many can you allocate to EUR 0,01? What if you would like to sell your shares in the future to a partner. If EUR 0,01 is one share and you sell 50% of your share capital? How does that work? I have no clue, and therefore you need to see the notary.
Let us assume you paid EUR 0,01 for the share capital. The first invoice to arrive at the door of your newly incorporate BV company is the notary’s invoice. That could be around EUR 1.000. How will the BV company pay for this amount with only EUR 0,01 in the bank account? In other words, the EUR 0,01 might not be the best move. I think you need to calculate what costs you expect before you make a turnover, add them up and then you have your share capital. Until then you have to transfer money from your private bank to the BV company, hence a current account situation exists.
The BV company is a limited liability company. That implies the shareholder cannot be held more liable than the amount of share capital he paid into the company.
In the above example that is EUR 0,01.
Do you actually think that EUR 0,01 will shield you from any liability?
Common sense would make you think no, and I think that is the right answer. If your name is for instance Mickey and you are a specialized advisor in the mice industry and you named your BV company Goofy. I hope you find it logical to understand that your clients do not come to you because of the Goofy BV company. They do not know Goofy BV company, but it is you Mr Mickey with extensive knowledge of mice, they came for.
The moment you advise on the mice for a client and for some reason the mice do not survive the advise given, your client will be holding you liable. The You is exactly what it is. You is Goofy BV company, but also you Mr Mickey the mice expert will be held liable on a personal base, as these clients would never have gone to the Goofy BV company if Mr Mickey would not have been working there.
In other words, in my opinion the limited liability is not shielded in a BV company when it was the expertise of the shareholder that made the clients come to the company.
This is only different when Goofy BV has a number of employees providing advise on mice and the company has grown such, that the client actually are attracted by the reputation of Goofy BV and no longer the reputation of the ultimate shareholder. Then the BV company does shield the liability.
Orange Tax Services
We can assist you with incorporation of the BV company, the setup of the bookkeeping, payroll and the contact with the Dutch tax office. Feel free to contact us to arrange an appointment in which we can discuss what we can do for you.