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Internationally operating companies structured through the Netherlands generally prefer to establish a limited liability company, a Besloten Vennootschap (B.V.).
Main characteristics of a limited liability company, B.V., laid down in the law, are:
- a paid up capital
- liability for shareholders in principal limited to paid up share capital
- transfer and issue of shares may be subject to shareholders permission
- shareholders are registered in a shareholders register at the companies address
- Shareholders may be limited companies, individuals, foundations and all kind of legal entities outside the Netherlands.
The incorporation procedure for a B.V. is finalized by a deed of a notary public, who legally sanctions the articles of association, followed by registration at Chamber of Commerce.
Public disclosure at this institute is limited, but includes the articles of association, board members, share capital and an annual balance sheet. Shareholder information must be filed at the public records of Chamber of Commerce if only one shareholder is owner of the company.
The articles of association serve as the internal operating document for the company and details the responsibilities, rights and duties of directors and shareholders.
Shareholders vote for the board of directors and, therefore, decide about the management of the company.
All activities of the company are executed and controlled by the management board.
As a consequence of important responsibilities under the law, such as personal liabilities for certain tax claims, it is required to have a management board in place able to comply with requirements.
A supervisory or non-executive board may be installed by shareholders if articles of association include a corresponding provision. The supervisory board monitors the company in general.
An important duty for the management board is to comply with accounting and filing requirements. A B.V. must report to shareholders a financial statement on activities and transactions on a yearly basis. Rules for reporting are laid down in the Civil Code and EU regulations apply. Audit may be required if certain conditions are met concerning balance sheet total, turnover and number of employees. A balance sheet must be filed at Chamber of Commerce within 12 months after the book year of the company has ended. Non-filing may lead to penalties and important liabilities for the management board.
At least once a year a general meeting of shareholders must be held. The main objective of this meeting is to decide about the annual accounts and liability discharge of the management board.