Solving debts: the cooperative

Liability for debts

A cooperative is a legal entity (rechtspersoon). This means that in principle you are not liable for its debts. There are some exceptions to this rule. Directors are liable if there has been misconduct that has led to bankruptcy, or if the cooperative has not been registered with the Business Register yet. Read more about directors' liability.

The articles of association list the liability of the members upon dissolution or bankruptcy. There are 3 options:

• UA: Cooperative with excluded liability (coöperatie met uitgesloten aansprakelijkheidcooperative). Members are not liable for any debts. 
• BA: Cooperative with limited liability (coöperatie met beperkte aansprakelijkheid). Members are liable for debts up to an agreed amount, that is stated in the articles of association.
• WA: Cooperative with legal liability (coöperatie met wettelijke aansprakelijkheid). Members are equally and jointly liable for debts of the cooperative.

Solutions for business debts

If you have business debts, there are several options:

1. Payment agreement 

When in debt or arrears, contact your creditors to explain the situation. And make arrangements together about payment. You may be able to get a postponement or agree on a payment schedule. This can also be done with the Netherlands Tax Administration and, for example, your bank or other financiers.

2. Court Approval of a Private Composition (Prevention of Insolvency) Act (WHOA)

Are you not able to solve the financial problems yourself but want to continue the cooperative? Then you can try to avoid bankruptcy using the Court Approval of a Private Composition (Prevention of Insolvency) Act (Wet Homologatie Onderhands Akkoord, WHOA). You come to an arrangement with your creditors. Not every creditor has to agree. If the court approves the arrangement, it then applies to all creditors. So you can continue your business. 

3. Bankruptcy and suspension of payment

Is the cooperative temporarily unable to pay its debts? You can file for a suspension of payment from the court. The cooperative will not have to pay its creditors for a period of time. In most cases, suspension of payment ends in bankruptcy.

If you can no longer come to a payment arrangement with your creditors, the court can declare the cooperative bankrupt. The court appoints a curator, who will take over all decisions and money matters. Before the court decides, a petition for bankruptcy must be made. You can do this yourself, but a creditor may also file for bankruptcy.

Note: if a creditor files for your cooperative's bankruptcy, you may try to avoid it by preparing a WHOA agreement. 

Sometimes it is possible to restart your business after bankruptcy.

Options for private debts

Did you co-sign on a loan for your cooperative? And are you now in private debt? There are several options for solving your debts:

Amicable settlement

You can apply for an amicable settlement to your municipality. An amicable settlement means that you look for a way out of your debts with support from municipal debt counselling. For example, by payment agreements, refinancing, or debt mediation. After the settlement trajectory, you will be free of debt.

Natural Persons Debt Restructuring Act (Wsnp)

If the amicable settlement fails, you can appeal to the district court for admission to the Natural Persons Debt Restructuring Act (Wet schuldsanering natuurlijke personen, Wsnp). In most cases, you will have to end your business. After debt restructuring, you will be free of debt.

Help dealing with debt

You do not have to solve your debts on your own. Use the dealing with debts step-by-step plan. In the next step, we tell you which organisations can help you. Or call the KVK Advice Team: 088 585 22 22.