The best legal structure for a cooperation

  • Ellen Koekkoek
  • How to
  • 2 May 2019
  • Edited 22 December 2022
  • 3 min
  • Starting

You have to choose a legal structure when you start a business. This also applies if you start a new business with a partner. Learn which legal structure best suits your cooperation.

When business owners 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 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 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. Turnover, profit, and income

How much you earn (turnover) and how much you have left (profit) largely determines which legal structure is most favourable for your tax return. Every legal structure has rules about how much tax you have to pay to the Netherlands Tax Administration. Estimate how much turnover and profit you will make. 

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?

Do you want to be privately responsible for your company's debts or do you want to limit that liability? In some cases, limited liability can be convenient. For example, if you carry out large projects where the damage can be considerable if something goes wrong.

With a vof or maatschap, you are (partly) jointly and severally liable if you or your business partner fail to comply with the obligations. Alternatives are a bv or cooperative. This limits your private liability unless there is bad management. Ask a specialist about the influence the liability has on, for example, your tax return or private situation (in Dutch).

5. Growing equity

Do you want to grow wealth within your company? Some business structures offer more opportunities for this than others. Keeping profit within your company and not having to pay tax on it immediately can, for example, be more difficult within a general partnership than with a private limited company. Except for some recognised reservation options for tax reserves. In addition to the tax reserves, the bv does not have a mandatory profit distribution. This can provide more financial room for your business operations.

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 also possible for a new business partner to join later. However, that is often more difficult, just like a partner leaving 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

A cooperation agreement ends automatically when the mutual project is done, or when you agree to terminate it together. You cannot simply transfer your share of the collaboration 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 so-called 'valuation methods' for this. Determine in advance which method of calculation you will use.

In addition, a partnership does not have registered real estate. If a sale or transfer is at hand, that real estate must be delivered through a notary. In a bv, a share transfer is necessary for the transfer of the company from 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. Take into account the costs of a notary and/or lawyer. You do not need a notarial deed for a professional partnership, general partnership, or limited partnership. You can arrange the agreements yourself. Such as about everyone's input, the profit distribution, and who is allowed to do what.

Contrary to what people think, little or no capital is required to set up a bv. This also applies to a maatschap, vof, cv, cooperative, or stichting.

All legal structures in a row

View all conditions and characteristics per legal structure:

Do you need help choosing? 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.

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