Search
Focus on enterprise
 
"It is costly wisdom that is bought by experience"
 
R. Ascham, teacher and writer (1515-1568)

Find an Employee

Name:
Sector: Jurisdiction:

Legal forms

When you want to start a company, you must first choose its legal form. Broadly speaking, you can choose between a sole proprietorship, a partnership (professional partnership/general partnership/limited partnership) or a capital company (private company with limited liability/public limited company).

A. Sole proprietorship

A sole proprietorship is a company run by a natural person at his or her own expense and risk. No distinction is made between company assets and personal assets, which means that the assets and liabilities of the company consist of the assets and debts. As the entrepreneur is personally liable, creditors dealing with a sole proprietorship can seek recovery directly from the entrepreneur's personal assets, while the creditors dealing with the assets of the entrepreneur can also seek recovery from the company's assets.

A sole proprietorship has no legal personality, and the entrepreneur is both founder and owner. The entrepreneur is personally liable for all debts. The creditors dealing with a sole proprietorship can seek recovery directly from the entrepreneur's personal assets, while the creditors dealing with the assets of the entrepreneur can also seek recovery from the company's assets.

B. Partnership


· Professional partnership

A professional partnership is a form of partnership involving two or more legal or natural persons (also referred to as 'partners'), who contribute to the partnership to work towards a particular objective. The partner's input may consist of labour, money and/or assets. The individual partners are not obliged to make equivalent contributions to the partnership. A professional partnership is often established by practitioners or professionals, including, for example, a partnership of doctors, attorneys at law or accountants.
 

· General partnership (V.O.F.)

A V.O.F. is created when a partnership contract is established between the founders, i.e. the partners. A distinction is made between the assets of the general partnership and the personal assets of the partners.

The assets of the partnership are also referred to as the separate capital of the V.O.F. In principle, creditors dealing with a partner cannot seek recovery from the partnership's capital. The separate capital is primarily intended for business creditors, and they are the only ones who can impair the partnership's capital.
Each partner in the V.O.F. is jointly and severally and personally liable for all of the partnership's debts.
 

· Limited partnership (C.V.)

The limited partnership is a special form of V.O.F. One major difference, however, is that there are two kinds of partners in a C.V.:
A. General partners, who are personally and jointly and severally liable for partnership debts.
B. Limited partners (silent partners), who are neither personally nor jointly and severally liable for partnership debts.

A limited partner finances the partnership and is only liable for the partnership's debts up to the amount contributed to the partnership. Limited partners who want to maintain this position must comply with various statutory conditions, one of which stipulates that the limited partner must not be presented as a general partner in external contacts. Another condition is that the limited partner's own name must not appear in the name of the C.V., as that would give the impression that the limited partner is a general partner and therefore can be held liable as a partner. In certain circumstances, however, this rule may be ignored.
 

C. Capital company


· Public limited company (N.V.)

An N.V. is a company with capital divided into shares and can be set up by several natural or legal persons. The shares in an N.V. can be transferred by notarial deed.

The profits the company generates accrue to the shareholders. No shareholders may be excluded from their share in the profits.

The general meeting of shareholders has substantial, mandatory powers, such as the power to designate, suspend or dismiss members of the board, the authority to resolve to reduce the capital and the authority to resolve to enter into a merger. The board members jointly, who together form the Board, see to the company's day-to-day management. There may also be a Supervisory Board to monitor the Board.

An N.V. must draw up annual financial statements and file them with the Trade Register. The requirements for drawing up and filing the financial statements depend on the size and scope of the company.

One reason for choosing to establish an N.V. might be that the shareholders' liability is limited to the amount of their shareholding. In addition, directors and any supervisory directors are not in principle personally liable for the company's debts. Finally, an N.V. can issue transferable shares which can be traded the stock exchange ('bearer shares').

· Private company with limited liability (B.V.)

A B.V. has the same organisational composition as an N.V., including the general meeting of shareholders and the Board. This legal form can also be supervised by a Supervisory Board.

One difference with an N.V. is that the shares in a B.V. can only be registered and are not freely transferable. A B.V. must also incorporate transfer restrictions in its articles of association and must draw up annual financial statements and publish them by filing them with the Trade Register. The statutory requirements once again depend on the scope of the company.

Disclaimer| General Terms and Conditions | Contact