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26 maart 2019 | Door: Joost Blom
A few weeks ago the Dutch Government has published possible new legislation for partnerships in The Netherlands. In The Netherlands we have waited for a long time for this legislation because the current legislation is very limited regarding partnerships and therefore there are a lot of uncertainties about some legal aspects of the partnerships. This new legislation should solve these problems.
However, the published new legislation is only a consultation version. This means that de Government publishes its thoughts about this legislation and the people and organizations are able to comment on this legislation. Afterwards, the Government will make a final version of this law. Then this law has to be approved by the parliament of The Netherlands. This process may take a year.
In addition to the fact that the current legislation for partnerships is not clear, there are also uncertainties about how to act in some situations. For example, it is unclear if it is possible to change a partner without canceling the ‘old’ partnership and founding a new partnership with the new partner. There are legal scholars who adhere to the opinion that you always have to cancel the partnership and found a new partnership when partners change. However, there are also legal scholars who adhere to the opinion that is must be possible just to change a partner without canceling the partnership. And there are more uncertainties of this kind in the current legislation. The new legislation must end these uncertainties and provide legislation that connects with the current trade.
In this newsletter we will have to limit ourselves to dealing with the most interesting topics of this legislation. One of the interesting topics is that a partnership will get a legal personality. This is an important addition to create more clarity about the legal position of the partnership.
In international trade the most used partnerships are the VOF (partnership) and the CV (limited partnership). Especially the limited partnership is for international trade interesting because you can limit your liability without establishing directly a limited liability company. Establishing a CV is much easier en mostly much cheaper. Within the new proposed legislation you can shape your (limited) partnership to your own situation even better.
Up until now there is not clear what the transitional law will be. This makes sense because mostly the transitional law will only be announced at the moment that the new legislation is almost ready. So we will have to wait and see what the consequences are for existing partnerships, but it is very obvious that the new law will automatically apply for the existing partnerships.
What is mentioned about the transitional law also applies for the tax rules regarding the ‘new’ partnerships. In the explanatory memorandum belonging to the new legislation there is mentioned that the new tax rules for the new partnerships will be as similar as possible to the current tax rules. Because the new partnerships will get legal personality, there will be, however, changes for the transfer tax. We will have to await the results.
As mentioned before, the government will collect all the comments from the people en organizations involved and then determine the definitive proposal for approval by the Dutch parliament. Only after the approval, these new rules will be effective. What changes this entails in the legislative process must be awaited. Of course we will keep you informed about this process.