5 obligations for starting entrepreneurs

For some, starting a business is fun and exciting. Others obsess about the problems or burdens, such as admin work and taxes. There is no denying that all starting entrepreneurs simply have to meet certain requirements. Good news! There are only 5. We have listed them all below, so you can tick them off your to-do list one by one.

• Check your name
• Choose your legal form
• Register your business
• Keep records
• File tax returns
• Industry obligations

1. Check your name

Do you already have a name in mind for your business? Check whether your name meets all the rules before you register your business. Punctuation marks are not allowed and the name must not be misleading either. KVK can only register names that follow the rules.

Video: Come up with a unique company name

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Find out whether your preferred name has already been taken by another brand or one of your competitors. They may demand that you change your name. That can be quite a hassle if you just built your website or had brochures printed. René and Hanneke van Ewijk experienced how annoying it can be. In 2017, the entrepreneurial siblings decided to register their food truck Just say cheese. “When we got to KVK, they told us that the name had already been taken, so we had to come up with a new one on the spot. We ended up going for HaRé, after our first names.”

2. Choose a legal form

Every business has a legal form. The legal form determines how your business is legally structured: who is liable for debts, for example, and what taxes you have to pay. You establish the legal form when you register your business with KVK. Before you go to KVK, figure out which legal form is the best fit for your business and situation.

Video: coose a legal form (in Dutch)

Photographer Johan Seijbel started an eenmanszaak (sole proprietorship). With this legal form, you are privately liable for any debts your business incurs. “Liability is not a big issue for photographers, so running an eenmanszaak works for me. If my business grows, I will reassess the situation.” You can change your legal form free of charge if it turns out that a different legal form is a better fit or your situation changes.

3. Register your business 

KVK considers you an entrepreneur when:

• You supply services and/or products.
• You charge more than the costs you incur (so you make money).
• You do business with people other than your family and friends and compete with entrepreneurs selling identical or similar products or services.

If you meet these criteria, you are usually required to register your business with KVK.

4. Keep records 

Did you know that entrepreneurs are required by law to keep records? Business records include invoices, receipts and time sheets, for example. You can keep hard-copy or digital records. During audits, the Belastingdienst (the Dutch Tax Administration) may ask you to open your books. 

Video: Make sure your business records are compliant

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You can also benefit from keeping records yourself. After all, your records show how your business is doing financially. Opening a bank account for your business will help you separate private and business expenses.

Entrepreneur Charlotte van 't Wout: “The figures are the best part of running your own business. They tell you exactly what you are earning and what mistakes you made.” 

5. File tax returns 

Business owners also have to deal with the tax authorities. In most cases, you will have to file a return for income tax and turnover tax (VAT).

• Income tax 
  This is the tax you pay on your income. You file an income tax return every year. As well as income tax, you also have to pay a contribution under the Health Insurance Act.
• VAT 
  Turnover tax is another word for Value Added Tax (VAT). In Dutch, this is called btw, short for Belasting Toegevoegde Waarde. You charge VAT to your customers and pay it to the Belastingdienst. VAT rates differ across products and services. Most entrepreneurs have to file quarterly turnover tax returns.

Filing tax returns is mandatory, even if you do not have a lot of revenue yet - or any revenue at all! Starting entrepreneurs are entitled to various deductions that mean they pay less tax. 

Tip: Do you have tax questions? Reach out to the Tax Administration. This is possible every business day through the chat feature. 

Industry obligations

That was the list! The five things that all starting entrepreneurs have to do. But beware: depending on your profession or industry, you may have other obligations too. Lawyers, for instance, are required to take out profession liability insurance. And if you want to work as a security guard, you will need specific diplomas. If you are starting a home business, you have to notify the municipality. 

For more information about these additional rules, check out our start-up situations in different industries.