The commanditaire venootschap, or limited partnership, is similar to a VOF (general partnership) except that there are two kinds of partners: a managing partner running the business on a day-to-day level and a limited or silent partner in the form of a financial backer.
This is a good option for entrepreneurs who are short on capital and need a financial backer. It is also a way to grow an eenmanszaak or VOF. The investor becomes a partner in the business, providing not only financial support but also guidance of the company’s financial affairs.
In case of bankruptcy the managing partner of a CV is personally liable for any debts. The limited partner is not held responsible for any debts, however they will lose their investment. It is important for silent partners to avoid acting as managing partner to the outside world as this can affect their liability.
When registering a CV with the KvK it is not necessary for limited partners to provide personal details, the number of silent partners and the amount of capital they contribute is sufficient.
The CV contract
There is no legal requirement to sign a partnership contract when setting up a CV. However a contract is strongly advised to avoid misunderstandings between partners. The partnership contract can be either created independently or via a notary and usually sets out:
- Who are the managing partners.
- Who are the limited/sleeping partners.
- What each partner brings to the company (labour, capital etc).
- How profits and losses will be distributed.
- Termination conditions of the CV.
The CV in a nutshell
- Establishment: free (small KvK fee) / partnership contract
- Capital required: none
- Governance: managing partners & limited partners
- Liability: private 100% for managing partners, limited liability for limited partners
- Social security: no sickness or unemployment benefits
- Taxation for managing partners: BTW / income tax / payroll tax (for employees)
- Taxation for managing partners: income tax
- Tax breaks: yes if requirements are met