The best legal structure for a cooperation

When entrpreneurs decide to start a business with others, they often opt for a vof (general partnership), bv (private limited company), maatschap (professional partnership), or cooperative as a legal structure. The choice for a legal structure depends on many factors. For example, how much you want to earn per month, and how much risk you are willing to take privately. Consider the following points and find a legal structure that works for you.

1. New company or cooperation agreement

Are you going to work together only once? Or is your collaboration temporary? Then you may not need to set up a company. A cooperation agreement is an easier and faster option.  

2. Common goal

If you are going into business together, you must have a common goal. Do you want to earn money or work together out of idealism?

If you want to make a profit, choose one of these legal structures:

• vof (general parnership)
• maatschap (professional partnership)
• cv (limited partnership)
• bv (private limited company)
• cooperative

Do you want to realise an idealistic goal? Then a stichting (foundation) can offer tax benefits.

3. Money matters

The legal structure also affects the finances of your business. So, it is important to choose a  form that suits how much you earn (turnover), and how much you have left over after paying all costs (profit). Try to estimate how much turnover and profit you will make, as the tax rules differ for each legal form.

A general guideline is that with a profit of approximately €120,000, a legal personality (such as a bv or nv) can be more attractive from a tax point of view. With a lower profit, a vof or maatschap may be more favourable. But every situation is different. List the financial consequences per legal structure. Or have a tax specialist or accountant calculate your income before you make a final choice.

4. Who is liable?

You may run up debts with your business. Or cause damage when working. Your legal form determines who is liable, that is, who has to pay the debts or damages. With some legal forms, you are also liable with your private assets.

Liability vof or maatschap

With a vof or maatschap, you are liable if you or your business partner fail to comply with the obligations. This is known as jointly and severally liable. Also, if your business partner incurs debts and cannot repay them, you may have to pay.

Liability bv or cooperative

Do you not want to be liable with your private assets? Then you can opt for a private limited company or cooperative. But even with these legal forms, there is a risk. If you mis-manage the company you will be liable. For example, if you take large and unnecessary financial risks. 

Limiting liablity

It can be smart to make sure you are not (entirely) privately liable. For example, if you carry out large projects, where the damage can be considerable if something goes wrong.Ask a specialist about the influence the liability has on, for example, your tax return or private situation (in Dutch).

5. Growing your equity

Sometimes it can be useful to save money within your business. This is called growing your equity. You then keep profits within the company instead of transferring them to your private account as salary. You do not have to pay tax on the money in your company immediately.

If you want to build up capital within your company, then a bv is a more convenient legal form than, for example, a vof. This is because with a vof you must distribute your profits. However, with a vof you can keep fiscal reserves. These are amounts or money you set aside and can deduct from your profits.

6. Entry and exit of partners

You might need an extra business partner in your company. In a cooperation agreement, you can mutually decide to attract a new partner. This requires a new mutual agreement. Members of a cooperative can also enter and exit relatively flexibly.

In other legal structures, it is often more difficult for a new business partner to join later or for a partner to leave the company. In a general partnership or professional partnership, you calculate which part someone contributes or takes out. In a bv this process is arranged through buying or selling company shares. The value of the shares must then be calculated. Consider if you need help from an accountant or tax specialist.

7. Transfer of the cooperation

You cannot simply transfer your share of a company to someone else. When selling a partnership, such as a general partnership or professional partnership, you must determine the value of the company. This can be difficult because you have to determine the value per partner. There are several valuation methods for doing this. Determine in advance which method of calculation you will use.

In addition, a partnership does not have registered real estate. Real estate is, for example, business premises. If you have real estate, you need to involve a notary when you transfer your share in the partnership. In a bv, a share transfer is necessary for the transfer of the company from person one to another. Ask an accountant or business valuator for advice.

8. Costs

You need a notarial deed to set up a bv, cooperative, or foundation. The cost of this varies depending on the notary  but will be at least several hundred euros. You do not need a notarial deed for a professional partnership, general partnership, or limited partnership. You can arrange the agreements yourself. 

You need capital to set up some legal structures. Little or no capital is required to set up a bv, maatschap, vof, cv, cooperative, or stichting.

More about legal structures

Visit our legal structures page for more information per legal form. Use the decision tool to help you make your choice.

Do you want to be sure of your choice? Consult a specialist to get an overview of financial, tax and legal consequences.