Inheriting and continuing a business

What to arrange when inheriting a company?

What you need to arrange when you inherit a company depends mainly on the business structure, the legal form, of the company but also on how you have accepted the inheritance. Make sure you have a certificate of inheritance (verklaring van erfrecht) from your notary.

What legal structure does the company have?

The legal structure of the company you inherit determines, among other things, who is liable for debts. Is the company a legal entity? In that case, as an heir, you are usually not liable with your own money for the debts of the company. Is the company not a legal entity? Then you may well be personally liable for debts.

Check if the deceased has entered into agreements. There may be additional agreements. For example, about the division of the company among several heirs.

For each legal structure, find out what happens if you inherit the company and want to continue it:

Sole proprietorship

You directly inherit all of the company's assets and debts. Contrary to what the name suggests, a sole proprietorship can also have staff. When you take over the company, you also take over the staff.

Private limited company (bv) and public limited company (nv)

Do you inherit a bv or a nv? Then you will receive the share of the deceased entrepreneur. You will then become a partial or full shareholder of the company.

You do not automatically become the director of the company. Succession is regulated in the articles of association of a company. Usually, the shareholders elect a new director during the general meeting of shareholders. As a shareholder, you may be able to vote on who can fill the position.

General partnership (vof), limited partnership (cv), and professional partnership (maatschap)

A clause (called ‘beding’ in Dutch) states what must be done with the share of a deceased partner. This clause is usually part of the partnership contract that was drawn up when the company was founded. The other partners remain part of the company. The clause contains agreements about how they should continue the business.

There are 4 types of clauses:

Foundation and association

Foundations and associations do not have shares. If the deceased was a director of a foundation or association, the articles of association state who will take over their place. Or who gets to decide who does If that is not the case, you as heir can ask the judge to appoint a new director. Because the foundation and association are legal entities, the assets remain the property of the foundation and association.

Filing an inheritance tax return

You have to pay inheritance tax when you receive an inheritance. Even if the inheritance is a business. You must therefore file an inheritance tax return. You will receive a letter from the Tax Administration within 4 months after the entrepreneur's death. This will tell you how and when to file the tax return.

Business succession scheme (BOR)

If you continue the business, you can apply for an exemption from inheritance tax. This scheme is called the business succession scheme (BOR). You will then pay less or no inheritance tax. You can also apply for deferred payment via the BOR.

Conditions for using the BOR

You must continue the business for at least 5 years. If you do not, you will still have to pay the inheritance tax you were exempt from with the BOR.

You must indicate in your tax return that you want to use the BOR. You will receive a letter from the Tax Administration about this, 4 months after the entrepreneur's death. It explains how to include the BOR in your tax return. Learn more about the terms and conditions (in Dutch).

Contact the bank

To continue the business, you need access to the company's bank account. When you contact the bank of the deceased, they will ask for a certificate of inheritance (verklaring van erfrecht) from your notary. This proves that you are authorised to make decisions. Only then does the bank have certainty about who is allowed to make decisions about the assets of the deceased. Such as the balances on payment cards, credit cards, and internet banking.

Employees retain rights

If the company employs staff, they keep their rights and obligations. You are not allowed to change their terms of employment, contracts, or the collective labour agreement (CAO) in any way. Nor are you allowed to fire staff.

You must inform the Tax Administration that you are taking over staff. To do this, complete the Notification of Wage Taxes Transfer of Activities form (formulier Melding Loonheffingen Overdracht van activiteiten, in Dutch). Will you become an employer for the first time as a result of the takeover? Then you must also report this (in Dutch) to the Tax Administration.

Check current contracts

Check all conditions and agreements of current contracts. This way you can assess whether you want to continue and take over the contract or end it.

For example:

• Lease contract: investigate whether you can take over the lease of the business premises.
• Agreements with suppliers and customers.
• Agreements on company insurances.
• Subscriptions (magazines, telephone and internet, window cleaner, fruit or flower service).
• Lease car: you can sometimes take over the lease car contract in the name of the company.
• Car owned by the company: read how to transfer ownership.

Take over the business administration

You are required by law to keep and save business records. Check the following:

• Does the company use an accountant, lawyer, or (tax) adviser? Contact them. They can advise you.
• Check current orders and outstanding bills. Contact suppliers and customers in time.
• Submit a VAT return
• Check whether there are any outstanding company debts. And whether there are any unpaid invoices.
• Are there current permits or licences? Check whether these are in the name of the company and when they must be extended.
• Contact the bank about current loans.
• Is there a file with customers and suppliers? Inform them all about the death of the previous director or owner. Also, let them know that you will continue the business.
• Are there any upcoming policy changes? Tell customers and suppliers.
• Check for patents on company products. A patent protects an invention for a maximum of 20 years. You have to pay a yearly fee (instandhoudingstaks) to keep the patent. Email the Netherlands Patent Office (in Dutch), part of RVO: octrooicentrum@rvo.nl

Contact the KVK Bereavement Support Team

Arranging inheritance matters for a company is complicated. The KVK Bereavement Support Team helps next of kin to arrange practical matters.