Why choose a BV? The basis for growth, protection, and continuity
A private limited company (BV) offers entrepreneurs a powerful combination of tax benefits, limited liability, and a professional image. Whether you are a startup entrepreneur or already have an established business, considering a BV structure can open the door to new growth opportunities and greater security. In this blog, you will read all about the three main legal forms, when you can switch from a sole proprietorship to a BV, and why a BV might be the right step for you.
Overview of legal forms
The choice of legal form depends on your growth goals, risk appetite, and financing needs. Below, we briefly explain the sole proprietorship, BV, and NV, so that you quickly gain insight into their characteristics and scope of application.
What is a sole proprietorship?
A sole proprietorship is the simplest form of business: as the entrepreneur, you are personally and fully liable for all debts of the company. There is no separation between private and business assets, and incorporation is limited to registration with the Chamber of Commerce without minimum capital.
What is a BV?
A private limited company (BV) is a capital company with legal personality. This means that the BV can act as an independent entity: it can enter into contracts, own assets, and incur debts. The shares are not freely tradable; any transfer takes place only with the approval of the other shareholders. This ensures that no unwanted investors can acquire shares in the BV.
What is a public limited company?
A public limited company (NV) is also a capital company with legal personality, but intended for larger or capital-intensive enterprises. An NV requires a minimum capital of €45,000 and has freely tradable shares. As a result, this legal form is ideally suited for attracting external capital, for example via the stock exchange or a broad group of investors.
What is the difference between a sole proprietorship, a BV, and an NV?
In the previous chapter, the characteristics of the sole proprietorship, BV, and NV were outlined. In this part, we delve deeper into the differences between them in areas such as incorporation requirements, liability, tax treatment, and governance. This will provide you with a clear overview of which corporate form best suits your specific situation and growth goals.
Formation requirements and minimum capital
Sole proprietorship
: You simply register with the Chamber of Commerce. No minimum capital is required, allowing you to start immediately without significant start-up costs.
BV
: Incorporation via a notarial deed in which the articles of association and share distribution are set out. By law, a minimum advisory capital of €0.01 is sufficient, although in practice most entrepreneurs opt for a higher amount to have some immediate breathing room.
NV
: Mandatory notarial deed with articles of association and shareholders' agreements. You must contribute a minimum of €45,000 in share capital upon incorporation, which immediately provides the NV with a solid capital base.
Liability by form
Sole proprietorship
: You have unlimited personal and business liability; in the event of extreme losses, creditors can also claim your personal assets.
BV/NV
: In principle, shareholders are only liable for the capital they contribute. Your private assets remain protected. You are personally liable only if you are also a director and exhibit irresponsible or personally culpable conduct as a director.
Tax treatment and tax brackets
Sole proprietorship
: The profit from your business is taxed in Box 1 of the income tax, with a progressive rate that can rise to approximately 49.5%. You can, however, make use of entrepreneurial facilities such as the self-employment deduction and the SME profit exemption.
BV/NV
: Profit is first taxed with corporate income tax: 15 % on the first €395,000 and 25.8 % above that. Upon distribution of dividends, you subsequently pay dividend tax in Box 2 at 26.9 %, allowing you to precisely manage the tax position of the director-major shareholder. However, as a director-major shareholder, you must pay yourself a market-rate salary (at least €51,000 in 2025) to avoid an additional assessment by the tax authorities.
Governance: Management and shareholders
Sole proprietorship
: As an entrepreneur, you have full control and are ultimately responsible for all decisions, without a formal meeting structure.
BV
: Decisions regarding strategic matters are made at the shareholders' meeting; the Managing Director is responsible for day-to-day management. This separation offers flexibility in collaboration and decision-making.
NV
: Stricter corporate governance requirements, often including a Supervisory Board (RvC) at larger public limited companies (NVs). Annual general meetings are mandatory, which enforces additional oversight and transparency.
When and why switch to a BV?
Here you can read in a single overview when it is better to switch from a sole proprietorship to a BV, and what the most important benefits of doing so are.
1. Moment of switching
Profit growth and tax optimization
: With structural profits exceeding approximately €100,000 and €150,000 per year, a BV pays off due to the low corporate income tax rate. You retain more net income, while further spreading the tax burden through profit reserves and reinvestments.
Complexity
: As soon as your business activities, contracts, or investments increase, you will want to protect private assets.
Preparation for sale or succession
: If you want in the long term to sell If you are planning a business transfer or are planning a company transfer, a BV offers flexibility. Shares can be transferred in stages, resulting in tax benefits and guaranteeing continuity. This allows you to steadily build a sales or transfer plan without interrupting your business operations.
2. Main benefits of a BV
Limited liability
: Your private assets remain protected: creditors can only claim against the capital of the BV, not against your personal possessions.
Tax benefits
: Benefit from lower corporate tax rates (15 % up to €395,000), build up profit reserves, and utilize schemes such as the innovation box for additional tax savings.
Access to growth capital
: Through share issuance, venture capital, or bank loans, you can easily raise external capital without burdening your private balance sheet. These financing options are also suitable for acquisition financing, whether you want one company to take over or multiple companies via a buy and build strategy.
Continuity and transfer
: Shares are transferable without the BV ceasing to exist, which makes step-by-step succession or sale smooth and tax-efficient.
Professional image & exit value
: A formal BV structure inspires confidence in buyers and financiers, provides clear insight into your financial statements, and can significantly increase the final selling price.
How do you easily set up a BV?
For a smooth and error-free incorporation of your BV, we use a structured step-by-step plan. Each phase is aimed at meeting all legal requirements and launching your business on a solid foundation immediately.
1. Preparation and Articles of Association
Choose an original trade name and draft the articles of association together with the notary. In these, you define the objective, share distribution, and powers, ensuring that all agreements are clear from day one.
2. Notarial deed of incorporation
The notary draws up the official deed and signs it on your behalf. In this document, the articles of association are definitively established and your BV acquires legal personality.
3. Registration with the Chamber of Commerce
After signing, you register the BV in the Trade Register of the Chamber of Commerce; you must also register yourself with the Chamber of Commerce as the ultimate beneficial owner (UBO). With your Chamber of Commerce number, your company is official and immediately findable for customers and suppliers.
4. Drawing up the opening balance sheet
You must draw up an initial balance sheet immediately as of the date of incorporation. This opening balance sheet is mandatory for the Tax Authorities and forms the starting point for your financial administration.
5. Open a business bank account
Finally, you open a business account in the name of the BV. This keeps private and business cash flows strictly separate and prepares you for transactions, payments, and financing applications.
Transferring a sole proprietorship when establishing a BV? Make use of the tax-neutral contribution.
Do you wish to contribute your sole proprietorship to your new BV? Then make use of the tax-neutral contribution during the notarial incorporation. With this, you transfer your business assets (including assets and liabilities) and hidden reserves (difference in value between book value and actual value) transferred to the BV without direct tax. You only pay tax upon the subsequent sale of assets or shares. This prevents liquidity bottlenecks and gives your BV a smooth start.
What do I need to take into account regarding a BV?
Setting up and operating a BV involves more than just the formal incorporation. You must take into account both the direct costs and financing options, as well as the ongoing administrative and compliance obligations.
1. Costs and financing options
Formation costs
: Expect approximately €500 to €1,500 in notary fees and €50 for registration with the Chamber of Commerce.
Annual costs
: Take into account accountant fees (from €1,500), mandatory publication costs for your annual accounts, and potential advisory costs regarding tax or strategic matters.
Financing
: You finance your growth with equity, a bank loan, venture capital, or through specialized growth financing and acquisition financing. By combining financing forms, you optimize both your capital costs
as your risk profile.
2. Administration, annual accounts and compliance
Bookkeeping
: A private limited company (BV) must maintain double-entry bookkeeping with a full profit and loss account and balance sheet.
Annual accounts
: This must be filed with the Chamber of Commerce within five months after the end of the financial year; you can request an extension if you need more time.
Tax returns
: Think of periodic tax returns, corporate income tax, dividend tax, and, for director-major shareholders, payroll administration with payroll taxes.
A process and timely execution of your compliance obligations prevent unnecessary costs, and well-structured administration ensures that your BV continues to operate smoothly in the long term.
Tips for a successful BV formation
Start with a baseline measurement
: Have an experienced advisor review your current business to identify opportunities and risks. This way, you start on a well-informed basis.
Draw up a solid business plan
: Clearly map out your growth potential and financing needs. A feasible plan accelerates financing discussions and gives direction to your strategy.
Involve your accountant and tax advisor early
: By involving specialists at an early stage, you avoid tax surprises and can take full advantage of deductions and schemes.
Think about pensions and insurance
: As a director-major shareholder, you have different pension and insurance options than an employee. Make appropriate arrangements in good time to avoid unpleasant consequences later on.
Long-term plan
: Consider from the outset how you will handle exit scenarios, succession, or a sale. A clear exit strategy ensures continuity.
Why choose Match Plan?
At Match Plan, we have over 30 years of experience in buying, selling, valuations, and financing. Our services are based on strong personal and business commitment, which contributes significantly to the successful completion of our assignments. We support you with:
- Providing insight into the real value of your company through the use of transparent valuation methods.
- Providing due diligence, targeted negotiation strategies, and support during the closing, so that you secure the best deal.
- Finding the optimal capital structure for your growth plans.
With our personal and committed approach, we ensure that your growth strategy is not only well thought out but also successfully executed. Contact us today and discover how we can help your business grow.
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