Which legal form you choose depends on three things: how you want to arrange liability, how much tax you pay, and how many people you do business with. The sole proprietorship is the most chosen form, but not automatically the right one for your situation. In this article, we list the nine legal forms and go through the questions that determine your choice.
What is a legal form?
A legal form is the legal structure of your business, which you register with the KVK Business Register. Your legal form determines, among other things, who is liable for debts and how your business is taxed.
By the way, sole trader (zzp'er) and freelancer are not legal forms, but forms of work: even as a sole trader you choose a legal form, usually a sole proprietorship (eenmanszaak). As soon as you are registered, you arrange the practical side of your business, such as your administration and a business account that suits your legal form.
Legal forms without corporate personality
Legal forms without corporate personality are the sole proprietorship (eenmanszaak), the general partnership (vof), the professional partnership (maatschap) and the limited partnership (cv). In these structures, there is no legal distinction between you and your business, so creditors can also claim your personal assets.
Sole proprietorship (Eenmanszaak): you are the sole owner and fully liable with your personal assets for the debts.
General partnership (Vof): two or more partners run a business together, where each partner is jointly and severally liable for all debts, including those of a co-partner.
Professional partnership (Maatschap): several professionals work together under a common name, where each partner is liable for an equal share.
Limited partnership (CV): besides a managing partner, there is a silent partner, who can only lose their contribution.
Legal forms with corporate personality
Legal forms with corporate personality are the private limited company (bv), the public limited company (nv), the association, the foundation and the cooperative. In these structures, the legal entity itself is liable for the debts and your personal assets remain protected, except in the event of mismanagement.
Private limited company (Bv): a private company with shares, suitable for a profit-making business and protected personal assets.
Public limited company (Nv): a public company with freely tradeable shares, intended for larger enterprises.
Association (Vereniging): a collaboration of members with a common goal, without distribution of profits to the members.
Foundation (Stichting): an organisation with a board and no members, aimed at a societal or social goal.
Cooperative (Coöperatie): an association that represents the collective interests of its members, for example in purchasing or collaboration.
Which legal structure is right for me?
Which legal form suits you is something you decide on the basis of four questions: about liability, tax, working with others and your plans to grow. There is no form that works best for everyone; it comes down to your situation and your risk. The following four points help you make up your mind.
1. Liability: are you personally liable?
You are personally liable as soon as your legal form has no legal personality, as is the case with a sole trader, a general partnership (vof) or a professional partnership (maatschap). If your business goes bankrupt, you also lose your personal assets in that case.
If you run a lot of risk in your work, for instance with large assignments or expensive investments, a private limited company (bv) shields your personal assets. You also cover many risks with solid contracts and professional indemnity insurance for freelancers.
2. Tax: how are you taxed?
How you are taxed depends on your legal form. With a sole trader, a vof or a maatschap you pay income tax on the profit, with deductions such as the self-employed person's allowance, the starter's allowance and the SME profit exemption.
With a bv the company first pays corporate income tax, and you only pay income tax once you pay yourself a salary or dividend. Those deductions have been scaled back in recent years, which shifts the comparison between the two forms.
3. Are you going into business on your own?
If you are going into business on your own, you usually choose a sole trader or a bv. If you work together with others, the vof, the maatschap and the limited partnership (cv) come into play, or you set up a bv together.
The difference: you use a vof for a business, whereas professionals such as dentists or lawyers often choose a maatschap. Always put arrangements for working together in a contract.
4. How big are your growth plans?
How big your growth plans are matters, because some forms scale more easily than others. If you want to attract investors, take on staff or come across as professional to large clients, a bv offers more options.
A bv also continues to exist independently of its owners, which is useful for continuity and transfer. If you start small and manageable, a simple form such as a sole trader is often enough.
What is the difference between a sole proprietorship and a private limited company (bv)?
The difference between a sole trader and a bv (private limited company) lies mainly in liability and tax. With a sole trader, you are personally liable and pay income tax on the profit, with deductions that are advantageous at a lower profit.
A sole trader is set up quickly with a registration at the KVK (Chamber of Commerce) and without a notary, and you can easily arrange a business account for freelancers for it. With a bv, your personal assets are protected and the company pays corporate income tax, after which you pay yourself a salary and potentially dividends.
A bv requires more administration and incorporation through a notary, but gives you more control over when your profit is taxed. You open a separate business account for your bv.
At what profit level does a BV become more advantageous?
The level of profit at which a BV (private limited company) becomes more advantageous varies per entrepreneur, but in 2026 the tipping point lies roughly between 90,000 and 120,000 euros of structural annual profit.
There is no fixed amount, as it depends heavily on how much profit you need for personal use and on your mandatory DGA salary (director-major shareholder salary), which will be at least 58,000 euros in 2026. If you leave your profit in the BV, you benefit from the lower corporate income tax rate, which starts at 19 per cent.
If you withdraw everything immediately, a sole proprietorship is often still more advantageous. The tipping point has decreased in recent years because the tax deductions for sole proprietorships have been phased down.
What does it cost to set up a legal entity?
What it costs to set up a legal entity depends on the form you choose. A sole proprietorship, general partnership (vof), or professional partnership (maatschap) is established with only a registration in the KVK Business Register, without the intervention of a notary.
For a private limited company (bv), public limited company (nv), or foundation (stichting), a notarial deed is mandatory, which means you should take into account notary fees of usually several hundred euros. In addition to its incorporation, a bv entails more ongoing costs, such as for the annual accounts and administration.
Can I change my legal structure later?
Yes, you can change your legal form later, for example from a sole proprietorship to a private limited company (bv) as your business grows. Such a transition does take time and money: you must register the new form with the KVK and the Tax and Customs Administration, and for a bv you must record this with a notary.
When converting a sole proprietorship to a bv, under certain conditions, you can opt for a silent conversion, so that you do not have to pay tax on hidden reserves immediately. Therefore, think through your choice in advance, but know that nothing is set in stone.
A business account that suits your legal form
Whichever legal form you choose, you need a business account that fits, and GoDutch offers that for every form. GoDutch is not a bank, but an all-in-one business account that automates your administration and brings your payments, cards, and expenses together in one app.
You can apply for the account in 3 minutes and have your IBAN and Debit Mastercard within 1 day, with a free entry-level package with no fixed monthly costs. All common legal forms are accepted, including the sole proprietorship, the bv (Dutch private limited company), foundations, associations, and homeowners' associations (VVEs), and for partnerships there is a business account for your general partnership (vof) with shared access for both partners.
Moreover, you get unlimited cashback on every payment with your GoDutch card, and if you run into any issues, a Dutch service team is available for you 24/7.
Open your business account quickly with GoDutch
Once you have chosen your legal form, you can quickly open the corresponding business account with GoDutch. You can arrange the application in 3 minutes and have your IBAN and card within 1 day, so you can start doing business right away.
FAQ
Frequently asked questions about choosing a legal form
Which legal form do most start-ups choose?
Most start-ups choose a sole proprietorship, because it is quick to set up and does not require a notary, and tax deductions such as the start-up deduction apply in the early years. Yet the sole proprietorship is not automatically the best choice: in the case of higher profits or more risk, a bv (private limited company) can be more advantageous and safer.
What is my business's legal form?
You can find your company's legal form on your extract from the Commercial Register of the KVK. The legal form was recorded when you registered, and you can request that extract online from the KVK. If you are not sure, the extract also shows your position and signing authority.
Can I combine multiple legal forms?
Yes, you can combine multiple legal forms. A commonly used structure is a holding company with one or more operating BVs underneath, which allows you to spread risks and distribute profits flexibly. You can also set up a separate BV alongside your sole proprietorship for a different activity. Seek advice from an accountant for a complex structure.
How long does it take to set up a legal structure?
A sole proprietorship, general partnership (vof) or professional partnership (maatschap) is often set up within a day, as you only need to register with the KVK. For a private limited company (bv) or foundation, it usually takes a few days to a few weeks, because a notary has to draft and execute the deed.
Which legal form is suitable for a charity?
For a good cause, a foundation or an association is usually suitable, as both serve a social purpose and do not distribute profits among the founders. A foundation has a board and no members, whereas an association does have members. For management purposes, you then arrange a business account for a foundation or association.
Is a business account mandatory for my legal form?
A business account is not legally required for every legal form. For a sole proprietorship or general partnership, you are allowed to make business payments via a private account, although a separate account is more organised. A legal entity such as a private limited company (bv) or foundation has its own assets and therefore almost always uses its own account. Whether a business account is compulsory therefore differs per legal form.
