Sold your business? Arrange the transfer and closing

In the final stage of the sale process, you transfer your business legally and administratively. What you need to arrange depends on the type of transaction you have agreed with the buyer: via assets and liabilities or via shares (in the case of a BV). Seek advice on your financial planning after the sale, so that you can remain financially stable even after you have sold your business.

Business transfer via an asset/liability transaction

If you have an eenmanszaak (sole proprietorship) or a VOF (general partnership), the business transfer always takes place via an asset/liability transaction. In the case of a BV (private limited company), you will have agreed during the negotiation phase whether the transfer will take place via an asset/liability transaction or via a share (equity) transaction.

Assets and liabilities

In the purchase contract, you have agreed which assets and liabilities will be transferred to the buyer. Examples include machinery or login details for software systems. On the agreed transfer date, these items are legally transferred to the new owner. At that point, the new owner also takes over the agreed contracts and takes responsibility for fulfilling the terms of those contracts.

Bank balances, outstanding invoices (such as accounts payable), and other liabilities usually remain with you as the seller. Examples include money in the business account, invoices you still need to pay, or an outstanding loan.

Sale and your income tax

When you sell or end your business, you must calculate the discontinuation profit. This is the difference between the book value of your business and its actual value at the time you end or transfer your business. This discontinuation profit counts as income in the year of sale. You will be liable for income tax on this amount.

Deductions and tax deferral

There are deductions available for the discontinuation profit.

• Part of your capital gain is exempt from tax under the business discontinuation relief.
• Depending on your situation, you may use part of the capital gain to take out an annuity (in Dutch) With an annuity, you pay a sum into a bank or insurance company which will be paid out to you later, for example as a supplement to your pension. You will pay tax on the amount paid out.

Retirement reserve (FOR)

Have you built up a fiscal retirement reserve? If so, the amount accumulated in your retirement reserve is added to your capital gains. You must pay income tax on this amount. If you do not wish to do so yet, you can sometimes defer this tax by using (part of) the amount to take out an annuity.

Sale to a partner, family member, or employee

Is the buyer a partner, family member, or employee? In that case, you may not have to pay tax on the capital gain. With the deferral facility (in Dutch) you can defer the tax on the capital gain to the buyer.

Changes to the KVK Business Register

Notify KVK of any changes to your company. We will process the changes in the Business Register. Until then, you remain the owner.

Business transfer via a share transaction

Only a legal entity whose capital is divided into shares (equity) can be transferred via a share transaction. For example, a private limited company (BV). Equity transactions must always be formalised by a notary. Upon the transfer of all shares, the entire business is transferred to the new shareholder. This includes all assets and liabilities, rights and obligations, staff, contracts, licences, and the entire history of the business.

Sale of shares and tax

The tax you pay on the sale of shares depends on who held the shares in the BV.

Privately held shares

Did you hold the shares in the BV privately? If so, you will receive the proceeds of the sale in your personal account. The difference between what you paid for the shares and what you now receive is your profit on the shares. You must pay substantial interest tax (in Dutch) on this profit in box 2 of your income tax return.

Shares held via a holding company

Were the shares in the BV held by a holding company? In that case, the participation exemption (in Dutch) applies. This means that the profit on the sale is not taxed immediately. The proceeds from the sale remain with the holding company. You can leave this money there and use it to invest or generate a return. Any profits the holding company realises in this way are subject to corporate income tax.

Transferring funds from the holding company to your private account

If, as a shareholder, you decide to pay a dividend from the holding company to yourself as a shareholder, the following applies:

• The holding company must deduct dividend tax from the payment.
• On top of this, you pay income tax in box 2 (substantial interest tax).
• You may offset the dividend tax already withheld by the holding company against this.

No VAT to be charged

When transferring your business to another owner, you do not have to pay any VAT (in Dutch) on the goods and services related to the transfer. The buyer assumes your VAT obligations. You remain liable for any VAT debts up to the moment of transfer.

Once the business transfer has been registered with KVK, the Tax Administration will send you a letter about the submission of your final VAT return. This final return covers the period during which you transferred the business. You must always submit a return, even if your VAT balance is zero.

Keep your records

After the sale, you must keep your business records for at least 7 years. You may do so digitally. In the sales contract you agree with the buyer who will keep the records. When selling property, such as business premises, a retention period of at least 10 years applies.

Updating the KVK Business Register

Following the transfer of shares, most notaries will inform KVK of the changes. The buyer of the shares may also do this themselves. As the former owner, you no longer have any authority to report changes after the transfer.

Transferring staff 

When your business is transferred, the new owner must take over all the rights and obligations relating to the staff. Employees keep the same terms and conditions of employment, and their length of service is also carried over. As the seller, you remain liable for fulfilling the obligations under the employment contract for up to 1 year after the transfer.

This only applies to obligations that were in place before the transfer date. For example, an agreement you and the employee made regarding their salary. If the employee has a dispute with the new owner about this, they can still hold you to account for it during the first year.

Read more about what you need to arrange for your staff when selling your business.

Financial planning

After the transfer of your business, your financial situation will look different. You will no longer have business income, but you will have assets or other forms of income. Work with your adviser to explore how to manage this income and these assets effectively and use them for the future.

What sort of income will you have after the sale?

After the sale, you can receive income in various ways, for example:

• pension
• annuity payments
• payments based on profit-sharing
• rental income from property
• dividends on shares
• interest on savings or investments
• other income

You can sometimes choose when this income starts or how you use it. For example, you can have your pension or annuity payments start earlier or later, depending on what suits your situation.

What assets will you have after the sale?

Once you have closed your business, your assets will often consist of:

• investments
• property (your own home or business premises)
• savings

You can use these assets to supplement your income, for example if you have a temporary drop in income. The return on these assets can vary and depends on the type of investment.

Seek good advice

A new financial situation calls for a new financial plan. Work with a financial adviser to determine:

• how much income you need
• how long you can live off your assets
• how to limit risks

This will ensure that you can live comfortably, both now and in the future, on the money released from the sale of your business.

A new phase of life

After the handover, a new chapter begins for you. Prepare for the transition to life without a business. Think well in advance about what you will do after the handover. You could also choose to stay on for a while with the new management, for example in an advisory role. This will make the transition a more gradual one.