ENTREPRENEURSHIP

Vennootschap onder firma (VOF)

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A vennootschap onder firma (VOF) is a partnership between partners. Read all about a VOF in this blog.

A vennootschap onder firma, abbreviated VOF, is a common legal form in the Netherlands. It is a form of enterprise in which two or more persons start a company. In the Netherlands, the VOF is legally regarded as a company in which all partners bear equal financial risk. This means that all participants are responsible for the debts and liabilities of the company. On the other hand, all profits are in principle shared equally among the partners. It is important to note that an VOF has no legal personality; this means that the VOF has no equity or identity of its own.

Advantages and disadvantages of a VOF?

A vennootschap onder firma (VOF) can be attractive for entrepreneurs who want to join forces. It is important to carefully weigh whether a VOF suits your business plans and needs. That is why we have listed the pros and cons for you.

Advantages of a VOF

A VOF is easy to set up.
No minimum capital is required.
You can benefit from the contribution of other partners.
You have the option of employing staff.
You are entitled to tax deductions through self-employment deductions amounting to €3,750 in 2024 and € 2.470 euro in 2025 (this is subject to certain conditions).
You are entitled to tax deductions through start-up deductions amounting to €2,123 in 2025 (this is subject to certain conditions).
You are entitled to tax deductions through SME exemption: not paying tax on 14% of your taxable profit. Starting in 2025, this relief will be 12.7%.
You are entitled to tax deductions through small business scheme (this is subject to certain conditions).
You will get the social security contribution after the age of 67.

Disadvantages of a VOF

All partners are jointly and severally liable with their personal assets for the debts of the company.
The bankruptcy of the vennootschap onder firma basically entails the bankruptcy of the partners.
If the company becomes single-headed after its incorporation, it is dissolved by operation of law.
At least two 'shareholders' are needed.
The limited transferability of shares makes it more difficult to exit as a partner.

Private liability with a VOF?

Unlike a bv, a VOF is not a legal entity. This means that the partners are personally liable for the company's debts. First, creditors will use the company's assets to pay the debts. If this is not enough, they will hold the partners liable. They may then seize the private assets of you and your partner. So you may have to pay off the partnership debts incurred by another partner with your private assets. However, this does not apply to another partner's private debts. Marital agreements prevent your partner from also being liable for the debts of the vennootschap. However, in a husband-wife firm, prenuptial agreements do not work because both persons are liable as partners.

Tax VOF

The entrepreneurs of a VOF are each self-employed and therefore pay income tax on their own profits. In addition, the partners also pay VAT on the products or services they sell. This usually involves 21% VAT, but the VAT rate may also be 9% or 0%. If you hire staff, you will also have to pay payroll tax. As a VOF entrepreneur, you therefore pay income tax, but in most cases you can also make use of certain deductions. You can contact us for more information.