Legal forms in entrepreneurship (partnership, sole proprietorship, limited liability company).

As an entrepreneur, you will have to choose a particular legal form when you start your business. With this, you assume a certain liability and have a tax obligation. But the legal forms in entrepreneurship differ. Below you can read more about the three most common legal forms: Partnership, sole proprietorship and limited liability company.

General partnership (vof)

A vof is a legal form in which several people involved are owners. These are called the associates. Thus, setting up a vof is often done when one wants to collaborate with other entrepreneurs under the same name. You can record the mutual arrangements in a vof contract, but this is not mandatory.

When you want to set up a VOF, you need to register it with the Chamber of Commerce (CoC). You don’t need any further start-up capital. All participants in the vof are additionally privately liable for the entire business.

Sole proprietorship

The sole proprietorship is the most popular legal form for sole traders and start-ups. In a sole proprietorship, one person is the owner, but there may be several staff members. As a result, this legal form also provides options for when your business grows after a while and you can no longer do everything on your own.

Establishing a sole proprietorship is very easy. You only need to visit the Chamber of Commerce to register your company in the Commercial Register.

Limited liability company (bv)

In a limited liability company, the capital is divided into shares and limited risks of joint and several liability apply. When you set up a limited liability company as a sole proprietor, you are simultaneously a director and sole shareholder. You pay yourself wages and pay income tax on them. You will also have to deal with dividend tax and corporate income tax.

A PLC is a legal entity, which means that in many cases the PLC is liable for any debts and not you as a private person.

Legal forms in entrepreneurship

Do you want to set up your own business? Then think carefully about what form of business suits it. Separate tax rules also apply to all legal forms in entrepreneurship. Read that, for example, in this article. It is difficult to adjust this choice afterwards and can have far-reaching consequences. Get good advice and list all the pros and cons. That way you can be sure you are making the right choice.