One of the most important reasons for incorporating a B.V. is a restriction of the liability of the entrepreneur. Contrary to the forms of cooperation as described elsewhere on this site, a limited liability company is a legal entity.  This means that the limited liability company can participate in legal actions by itself and can perform legal acts (e.g. to purchase, to sell, to rent out and to take on staff). These acts may generate a profit or a loss. When a B.V. has debts, the creditors can only draw on the assets of the B.V. and not on the private assets of its directors or shareholders (unless mismanagement or violation of legal rules can be evidenced). The B.V. must be incorporated by a notarial deed, including the articles of association of the B.V. The articles of association will in any case state the name and the purpose of the B.V., its statutory seat, the powers and responsibilities of the managing board, the number and par value of the shares, and a regulation restricting the possibility to transfer shares to another party (the B.V.’s ”limited character”).


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