Public limited company (nv)
- 6 August 2021
- Edited 20 March 2023
- 6 min
Do you need a lot of capital for your business? Then choose to set up a limited liability company (nv). By issuing shares you provide capital for the company. The shareholders have a vote within the company. When do you set up an nv? Find out more.
What is a public limited company?
A public limited company, or in Dutch a 'naamloze venootscha, nvp', is a company with . This means that an nv can act and decide for itself. The nv is the entrepreneur and is led by the board, also known as the management. The capital of a public limited is divided into shares, which are held by the shareholders. The General Meeting of Shareholders ('algemene vergadering van aandeelhouders', AVA) can appoint and dismiss the board.
Unlike a private limited company (bv), you can resell the shares of an nv. The legal personality means that directors are not liable with their private assets for any debts of the nv.
An nv often has a supervisory board ('raad van commissarissen', rcv), which monitors the management (two-tier board). In other cases, the supervisors are part of the board (one-tier board).
Setting up an nv
You need a civil-law notary in order to set up an nv, alone or with others. The civil-law notary draws up the notarial deed containing the articles . Topics in these internal rules are:
- the purpose of the NV
- the activities of the NV
- the powers of the management
- the quantity and types of shares
The notary registers your nv and all the directors in the Dutch Business Register ('Handelsregister') at the Netherlands Chamber of Commerce KVK.
In addition, you register the ultimate beneficial owners (UBO) of your nv in the UBO register of KVK. UBO’s are persons with more than 25% of the shares in an NV. UBO registration is not required for listed NVs.
Public limited company in formation
You can start doing business with your nv before it has been set up at the civil-law notary. The notary declares to take care of setting op the nv and records this declaration in the Business Register. The nv will come forward as an ‘nv in formation’ (in Dutch: nv in oprichting or nv io) until it is established.
You must clearly indicate in this phase, that you are acting or entering into contracts on behalf of the ‘nv in formation’. After its formation, the nv can ratify these actions, or take over the rights and obligations. Note that you are personally liable as long as you act on behalf of the ‘nv in formation’.
Setting up an NV costs money. With a standard nv, the amount is between €400 and €2200 in (in Dutch). You must also invest at least €45,000 in the nv as starting capital. The civil-law notary takes care of the registration of the nv in the Business Register at KVK. This is a one-time registration fee.
In addition, there are costs for bookkeeping. Your nv must draw up annual accounts and file them with KVK. Which information you have to submit depends on the size of your company. The annual administration costs depend on the size and complexity of your company.
An nv is a legal personality ('rechtspersoon'). This means that directors are not liable for debts. Is your company going bankrupt? Then the NV as a legal personality goes bankrupt. There are exceptions to this rule. For example, directors are liable in the event of maladministration, or if the private limited company is not yet registered with the Business Register. Read more about the liability If you are a shareholder, you are only liable up to the amount of your shares.
You generally do not opt for an nv only because as a director you are not personally liable. An nv has higher costs, more administration, higher taxation and is more complex than, for example, a sole proprietorship. In other legal structures, risks can also be effectively covered by, for example, taking out liability insurance or by drawing up general terms and conditions.
The entire board is authorised to sign. Directors may either jointly or individually sign contracts or perform certain legal acts on behalf of the company. In the articles of association you record which director may sign alone or who must sign with another board member. This is also recorded in the Business Register.
The nv can also give someone els e power of attorney. This is a statement that this person may perform specified actions on behalf of the. It is not mandatory to register an authorised representative business agent with the Business Register, however, it can be useful. For example, it is a way to inform your business partners about who is allowed to act on behalf of the company.
If you are a director of a public limited company, you pay income tax on your wages. The Tax and Customs Administration does not allow you to give yourself as a director no or very little salary. Directors must pay themselves a market conform salary, with in principle a minimum annual salary of €51,000. This is called the customary salary scheme ('gebruikelijkloonregeling'). Read more about the exact rules and conditions on the Tax (in Dutch).
The nv, as a legal personality, pays corporate income tax (vpb) on the profit. The tax on the profit is called corporate income tax ('vennootschapsbelasting', vpb). The NV pays 19% corporation tax on profits up to €200,000. For the part of the profit above 200,000 euros, the rate in 2023 is 25.8%.
The general meeting of shareholders may also decide to do a profit distribution. Shareholders will then receive a dividend. The nv withholds 15% dividend tax from the profit distribution and pays this to the Tax and Customs Administration. Do you have a ‘ ('aanmerkelijk belang', in Dutch)? Then you pay 26.9% tax on the gross distributed dividend. You may deduct the dividend tax withheld by the nv in your tax return. Dividend tax can be seen as input taks ('voorbelasting').
The nv must keep business records, an administration. Bookkeeping, or accounting, is an important part of that. With the data from that bookkeeping you prepare annual accounts. These provide an overview of the financial position of the company. You make an overview of what costs you have incurred and what money has come in. You file your tax returns based on these annual accounts. You must keep the business records. The nv must file the annual figures with KVK after the end of the financial year. These filed documents are public.
The Tax and Customs Administration sets requirements for the administration, which consists of more than just the annual accounts. For example, also it also contains invoices, notes and agendas. Administration is mandatory, but it is also useful knowing how your company is doing.
An nv can hire personnel. You have to pay payroll taxes and social contributions for your employees. If you are hiring employees for the first time, you must register as an employer with the Dutch Tax and Customs Authorities. You must also report this to KVK. Read what you need to arrange when you hire staff for the .
Are you a director and do you own more than 50% of the shares? Then you are no longer covered by employee (WW, WIA, ZW). This also applies if you and your immediate family members own two-thirds of the shares or in case you cannot be fired against your will.
The structure nv
Does the nv have more than 100 employees, a mandatory ('ondernemingsraad', OR) and a subscribed capital of more than 16 million euros for more than 3 years? Then there is a structure nv. In this case, a supervisory board is mandatory.
An nv can buy or sell shares on the stock exchange. The advantage is that it is easier to raise money by issuing shares. There are conditions to be quoted on the stock exchange. For example:
- your company must be in existence for more than 5 years,
- the equity must be at least equal to 5 million euros
- the total value of the shares must be more than 5 million euros.
- Your company must also have been profitable for at least 3 years in the past 5 years.
Ending an nv
A formal decision from the general meeting of shareholders is required in order to end an nv. Only when all debts and benefits have been paid (liquidation) does the mv cease to exist. Read more about dissolving a .
Keep in mind that closing your nv may have consequences for, for example, permits from the municipality, financing, insurance, pension fund or bank account of the nv. Consult the website of the relevant (financial) institution to check which steps you must follow if you terminate your nv.
When do you choose an NV
If you have an existing company or want to set one up and you need a lot of capital, you opt for an nv. By issuing shares you raise capital for the company. Shareholders do have a vote at the general meeting of shareholders. These shareholders meet at least once a year. This means that you are giving up some control as a founder/director.
Do you want to know which legal form suits you best? Find out with the Tool for choosing a Dutch .