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Dissolving a sole proprietorship in the Netherlands: how does it work?

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Dissolving a sole proprietorship in the Netherlands requires some important tax and legal steps. Read more about it here.

Closing a sole proprietorship (eenmanszaak) in the Netherlands requires some important tax and legal steps. Here is a detailed guide to help you complete this process.

1. Inventory and preparation

Before you start the actual dissolution of your sole proprietorship, it is important to make an overview of all current liabilities and assets. Think about outstanding invoices, contracts with customers and suppliers, and any staff.

Checklist:

Collect outstanding invoices
Terminate or transfer current contracts.
Inventories and assets inventory

2. Deregistration with the Chamber of Commerce (CoC) in the Netherlands

Formally winding up your sole proprietorship starts with the Chamber of Commerce (CoC). This can easily be done online via the Chamber of Commerce website.

Steps:

Go to the CoC website and log in with your details.
Complete the business termination form.
Gather the necessary documents, such as a copy of your proof of identity.
Submit the form digitally.
After submitting the form, you will receive a confirmation from the Chamber of Commerce. They will automatically inform the Tax Administration of the dissolution of your business.

3. Handling tax affairs in the Netherlands

When you wind up your sole proprietorship, a number of tax obligations also come into play. These need to be handled carefully to avoid problems in the future. You can do this yourself or have an bookkeeping firm do it for you.

Administration steps:

Close your administrative financial year and prepare a final balance sheet.
File your last VAT return.
Report your income in your last income tax return.
Register for the small business scheme (if applicable).

4. Inform involved parties

Make sure all parties involved are aware of the dissolution of your sole proprietorship. This includes customers, suppliers, banks and any other business relations.

Steps:

Send an official notice of business closure to customers and suppliers.
Close business bank accounts after settling all outstanding payments and receipts.
Cancel insurance and other business contracts.

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5. Keep records

According to Dutch law, you are obliged to keep the administration of your sole proprietorship for at least seven years. This applies even after the dissolution of your business.

Steps:

Make digital and physical copies of all important documents.
Keep these documents in a safe and accessible place.

6. Personal matters

Once your sole proprietorship is formally dissolved, there are still some personal matters you need to take care of. These can range from reviewing your personal insurance policies to adjusting your retirement planning.

Steps:

Review your personal insurance policies and adjust them if necessary.
Review your pension provisions and make new arrangements if necessary.

Advice on dissolving a sole proprietorship in the Netherlands

Closing a sole proprietorship in the Netherlands requires careful planning and implementation of various tax and legal steps. By following the above steps, you will ensure that the process runs smoothly and that you meet all legal obligations. This will help you move on to your next adventure, whether that is a new business or another career move, without worry. Need help with dissolving a sole proprietorship or starting a business? Then get in touch with us.

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