Sole trader
One owner (with or without employees) is entitled to the company's profit.
Sole trader liability
› There is no distinction between business and personal assets; if the owner has personal (business) obligations, the creditors can demand that he / she pays from his / her business (personal) assets.
› If the owner is married (communal estate), creditors can make claims on the partner’s assets. In case of marriage contract, the partner’s assets fall partially (or completely) outside the area of liability.
Sole trader taxation
› Income tax on the profit
› Turnover tax
› Owner may be entitled to self-employed tax allowance
Limited partnership (Commanditaire Venootschap - CV)
› CV is a special form of General partnership (VOF) in which partners may be:
- Active in business and considered self-employed entrepreneurs.
- Limited / silent / sleeping partners who a) contribute funds, b) have less authority and bear less risk, c) can use their names in the name of the partnership.
› Limited partnerships are usually developed from Sole trader or General partnership (VOF) if a silent partner enters the business.
› No legal form required; a written agreement is not required by law but it is highly recommended.
CV liability
› Active partners are liable for obligations.
› Silent partners are liable for the amount they invested.
› If an active partner is married (communal estate), creditors can make claims on the partner’s assets. In case of marriage contract, the partner’s assets fall partially (or completely) outside the area of liability.
CV taxation
› Active partners (as self-employed entrepreneurs) are entitled to:
- self-employed tax allowances
- fiscal retirement reserve
- working partner’s allowance
- termination allowance
› Active partners also pay income tax over their profit share.
› Silent partners are taxed on remuneration received since they are considered to have joint entitlement.
› Turnover tax
Partnership
› Entrepreneurs working together to exercise a liberal profession (doctor, lawyer, graphic designer etc.) and are considered self-employed entrepreneurs.
› No legal form required; a written agreement is not required by law but it is highly recommended.
Partnership liability
› Each partner is liable for the obligations of the partnership but not for the individual obligations of the other partners.
› If a partner is married (communal estate), creditors can make claims on the partner’s assets. In case of marriage contract, the partner’s assets fall partially (or completely) outside the area of liability.
Partnership taxation
› Income tax on each partner’s profit share
› Each partner is entitled to self-employed tax allowance
› Turnover tax
General partnership / Partnership under common firm (Vennootschap Onder Firma - VOF)
› At least two partners who contribute money, goods and / or manpower. Every partner is considered a self-employed entrepreneur.
› No legal form required; a written agreement is not required by law but it is highly recommended.
VOF liability
› Each partner is liable for obligations and thus, creditors can make claims on his / her personal assets.
› If a partner is married (communal estate), creditors can make claims on the partner’s assets. In case of marriage contract, the partner’s assets fall partially (or completely) outside the area of liability.
VOF taxation
› Income tax on each partner’s profit share
› All partners may be entitled to self-employed tax allowance
› Turnover tax
Special case of VOF
The "husband-wife business" is a special case of VOF in which:
› Both are jointly and severally liable (communal estate and marriage contract).
› Equality in performing tasks is necessary in order to claim allowances.
