Open Joint-Stock Company (NV) in the Netherlands
Among the various forms of organizational legal forms of ownership in the Netherlands, open joint-stock companies are in high demand among the founders of new companies. Companies such as Naamloze Venootschap (NV) are enterprises with an authorized capital of at least €45,000.
It is divided into shares of a certain type, by analogy with a private closed limited liability company. What is the main difference between the two types of open joint-stock companies in the Netherlands?
There are differences in the format and type of issued shares. In addition to the inscribed shares, which determine the number of shares of a particular shareholder of an enterprise, companies like Naamloze Venootschap also offer share warrants to bearer available to the public.
You can sell and buy these securities on the stock exchanges, if necessary. Private closed joint-stock limited liability companies issue exclusively inscribed shares. They can be transferred or donated only in cases of certification and registration by a notary.
The second difference significant for many founders is the size of the minimum authorized capital. If for a private closed joint-stock company you need only one euro cent on an open deposit, then open public companies like Naamloze Venootschap will require investments starting from €45,000.
Please note, that Naamloze Venootschap public joint-stock companies are no longer allowed to offer share warrants to bearer as of 01/01/2020. If shares of this type have already been issued, enterprises need to correct the documentation and exchange share warrants to bearer for standard inscribed shares.
If you are interested in how to register an open public limited liability company in the Netherlands, the specialists of our company are always ready to help. We will guide you through all the obstacles and bureaucratic encumbrances, saving your time, money and nerves.
You do not need to personally delve into the finer points of the Dutch law, because we will take the laborious process of registering new business in one of the most developed countries in Europe upon ourselves. The experts of our company will help you in collecting the required documentation, after which you will only need to verify all the data and information by signing the statutory documents.
Obtainment of an Identifier (LEI)
Regardless of the type of activity and form of ownership, any joint-stock company that issues its own securities in the form of shares and wishes to sell and buy them on the stock exchange must receive a unique LEI.
This is the so-called legal entity identification number, which is subsequently used to control any transactions and transfers of the newly established company. The LEI is required by the Dutch government authorities who verify the legality and transparency of any financial flows.
Responsibility of a Naamloze Venootschap (NV)
As for the basic requirements and responsibilities of a public open joint-stock company Naamloze Venootschap, for the most part they have much in common with those of private closed enterprises. This applies to both taxation and the provision of social benefits and needs.
The founders and directors of a public joint-stock company Naamloze Venootschap in the Netherlands are theoretically not liable for the company’s debts. It means that they do not risk their own property and personal accumulated capital.
However, many financial institutions in the Netherlands will require some type of guarantee from the founders or directors. Liabilities can extend to the property, for example, which will become a guarantee against the “accidental” bankruptcy of a newly established enterprise.
If this happens, the founder will be personally liable and will be required to pay off any debts due to the financial institution. Otherwise you may face criminal liability with rather unpleasant consequences.
In what situations can you be responsible for managing a newly established open company in the Netherlands? It could be:
- Conclusion of rather “optimistic” or a priori impracticable contracts as a manager or director. You must anticipate situations when your enterprise will not be able to fulfill its obligations;
- Failure to inform the relevant services and control authorities in the Netherlands that you have delayed payments or have not paid the necessary taxes or social contributions at all;
- The delay of payment or complete non-payment was the result of official negligence or official inconsistency, as well as as a result of non-professional management of the company. The violations have become periodic and occurred for at least a three-year period;
- The newly established enterprise became bankrupt due to non-professional management within the previous 36 months. Non-professional management may have the form of absence of annual financial statement, for example;
- Making financial payments that are a threat to the financial stability of the enterprise.
In most situations, the liability of the management team and founders is limited to the amount of their financial participation in the authorized capital of the company.