Do you run a sole trader business with several different activities and are you considering switching to a limited company (bv)? Then the question is not just whether you convert, but also how you set up the structure. The right approach can save you a great deal of tax, risk, and hassle further down the line.
Why structure is especially important when you have multiple activities
If you operate as a freelancer or sole trader offering one clear service or product, opting for a single limited company is usually straightforward. But as soon as you run multiple activities — say, consultancy alongside property management, or an online shop next to advisory work — the situation changes. Each activity has its own risk profile, its own client base, and possibly a different tax treatment.
If you put everything into one limited company, you transfer the risks of one activity onto the others. If something goes wrong in one branch of your business, it can have consequences for the entire company. A well-considered structure prevents that scenario.
The most commonly used structures for multiple activities
One operating company for all activities
The simplest option is to place everything within one operational limited company. This is straightforward and relatively inexpensive to manage. The drawback: you cannot ring-fence the activities from one another. If one activity incurs debts or gives rise to liability, this directly affects the rest of your assets held within that company.
This approach can work if your activities are closely intertwined, carry similar risks, and you consciously choose simplicity over separation.
Holding company with multiple operating subsidiaries
A popular and fiscally attractive structure is a holding company with several operating subsidiaries beneath it — one for each activity (or group of activities). The holding company owns the shares in the operating subsidiaries and can receive profits tax-free via the participation exemption.
Advantages of this structure:
- Activities are legally separated from one another, meaning liability remains limited to each entity.
- Profits can be channelled from the operating subsidiaries to the holding company, where they can be accumulated or reinvested.
- Should you ever sell one activity, this can often be arranged tax-efficiently via the participation exemption.
- Your personal assets — such as savings or your own home that you may hold through the holding company — remain better protected from business risks.
The drawback is that you face more administration: multiple sets of annual accounts, multiple tax returns, and higher advisory costs. This only truly pays off when profits or the scale of operations are sufficient.
One holding company with internal division
An intermediate solution is a holding structure with just one operating subsidiary, but with an internal administrative separation per activity. For example, you record entries via different cost centres or project administrations. This is less costly than multiple operating subsidiaries, but offers less legal protection. The activities can be distinguished administratively, but are not legally ring-fenced.
Plan een vrijblijvend gesprek en ontdek wat we voor je kunnen betekenen.
Plan een gesprekWhat does the choice depend on?
There is no universal answer. Which structure suits you best depends on several factors. A few questions to ask yourself:
- How significant is the liability risk per activity? Consider contractual risks, employees, or product liability.
- Is there a chance you might sell one of the activities in the future or bring in a partner?
- How profitable are the individual activities? Multiple limited companies only make sense when profits justify it.
- Are the activities heavily dependent on one another, or do they operate entirely independently?
- Do you want to build up and protect assets within the structure, for instance with a view to the future?
If you are considering converting a sole trader business to a limited company with multiple activities, it is wise to work through the numbers carefully beforehand and have the legal aspects reviewed. An incorrect structure now can be costly to correct later.
Practical points to consider during conversion
Once you know which structure you want, the implementation begins. A few things to bear in mind:
- Clients and contracts: Ensure that your existing agreements are correctly transferred to the appropriate limited company. Not all contracts transfer automatically.
- Tax treatment on transfer: With a tax-neutral transfer, you carry forward the fiscal book values; with a taxable transfer, you settle up first. Which method is most advantageous varies by situation.
- Intercompany charges: If multiple limited companies jointly provide services or share costs, you will need clear agreements (and a management services agreement) in place.
- Customary salary: As a director-shareholder, you are required to pay yourself a customary salary. With multiple limited companies, you need to consider which entity this is paid from.
- Administration: More entities means more administrative obligations. Sound administration is not optional with a holding structure — it is a requirement.
The role of tax advice in making the right choice
The choice of structure has a direct bearing on your tax burden, liability, and long-term flexibility. Professional tax advice helps you not only with the decision, but also with the implementation: from the method of transfer to the incorporation of the right entities. This is not an area in which to cut corners, as a sound structure pays for itself.
Why Belastingadviseur Eindhoven
At Belastingadviseur Eindhoven, we are happy to think through the structure that fits your activities and ambitions with you. Whether you have two activities or five: we assess what makes the most sense fiscally and legally for your specific situation. As part of Adviesgroep Eindhoven, we work alongside other specialists, so you can come to us for all aspects of your business.
Would you like to know which structure works best for you? Feel free to get in touch with us — no obligation. We are happy to help.
Frequently asked questions
Can I place multiple activities within one limited company?
Yes, you can. It is the simplest option, but it provides no legal separation between activities. Where risks are higher, or where you plan to sell one activity at a later stage, a holding structure with multiple operating subsidiaries is often the wiser choice.
What is the advantage of a holding company when you have multiple activities?
A holding structure legally separates your activities from one another, protects accumulated assets, and offers tax advantages when distributing profits and potentially selling an activity. The participation exemption plays an important role here.
Do I need to set up a separate limited company for each activity?
Not necessarily. Whether separate limited companies are worthwhile depends on the scale, risk profile, and future plans for each activity. Sometimes an administrative separation within one operating subsidiary is sufficient. Seek advice to find the best option for your situation.
How much does a holding structure with multiple limited companies cost?
The incorporation costs and annual management costs are higher than with a single limited company. Consider notary fees per entity, multiple sets of annual accounts, and additional tax returns. This only becomes worthwhile when your profits and activities are of sufficient scale.
We are happy to think along with you. For advice tailored to your situation we would gladly sit down with you. No rights can be derived from the content of this page and it may contain inaccuracies.
