Liability

The question to what extent you are liable with your private assets plays an important role for many people when choosing the right form of company. With corporate forms with legal personality such as the BV, the NV and the Cooperative, the legal person (the BV, the NV, the Cooperative) is liable. With unincorporated business forms such as sole proprietorships, partnerships and general partnerships, the owner/partner is liable.

Liability for an unincorporated form of enterprise

With an unincorporated form of business, the entrepreneur is privately liable for all debts of the business. This means that creditors of the company can recover from both the company assets and the private assets of the entrepreneur. Therefore, if you are married in community of property, not only your own assets but also your joint assets are the object of recovery by creditors.

Liability for incorporated businesses

Companies with legal personality are legal entities. A legal entity is an independent bearer of rights and obligations, just like a natural person (like you). This means that, in principle, only the legal entity is liable for debts. In principle, the shareholder cannot lose more money than the amount he invested in the legal entity. This therefore limits the shareholder's risk. However, if there is mismanagement, the directors of a legal entity can also be held liable in private.

For more information on liability, please contact us. We will be happy to advise you.