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The Partnership Modernization Act replaces the 1838 rules for the general partnership (vof), limited partnership (cv), and professional partnership (maatschap). The major changes are that the general partnership and professional partnership will merge into one new legal form — the public partnership (ov) — and both the ov and the CV will acquire legal personality. Creditors will then first sue the partnership itself; additionally, partners remain jointly and severally liable if the partnership is unable to pay. The law is still in preparation and the effective date has not yet been set. Below is what changes, for whom, and what you can do now.
The short answer
- What: Modernization of the outdated law (1838) for partnerships.
- General partnership and professional partnership: merge into the public limited company (ov).
- CV: remains a separate legal form.
- Legal personality: both the public limited company and the limited partnership become legal entities — assets and contracts in one's own name.
- Liability: partners remain jointly and severally liable, but only after the partnership itself is unable to pay.
- When: still unknown — the law is being prepared.
Why a new law?
The current rules for partnerships date back to 1838 and do not align well with how entrepreneurs collaborate today. They are scattered across the Commercial Code and the Civil Code, and are unclear in some respects. The Partnership Modernization Act brings everything together in a single modern regulation that is better suited to general partnerships, professional partnerships, and limited partnerships.
For those who do business together — traders, liberal professions, farmers, and new partners — significant changes will soon occur regarding legal form, liability, and the way the company presents itself to the outside world.
From general partnership and professional partnership to a single public company
Currently, we have three types of personal partnerships: the general partnership (vof) (trade), the professional partnership (liberal professions and agriculture), and the limited partnership (cv) (with silent partners). In the new law, the distinction between general partnership and professional partnership disappears. Both are merged into the public partnership (ov).
The distinction between a “profession” (partnership) and a “business” (general partnership) thereby disappears. In practice, that distinction mainly led to disputes without offering much benefit to the entrepreneur. The limited partnership, however, continues to exist separately, because it has its own function: allowing silent investors to participate without them holding management positions.
Legal personality: the biggest change
Both the general partnership and the limited partnership will soon acquire legal personality. The partnership will then become an independent legal entity, separate from the partners. What this concretely entails:
- Ownership in one's own name. The company can itself own, for example, business premises, a car, or inventory — no longer all partners together.
- Easier entry and exit. A partner joining or leaving no longer needs to transfer all assets and contracts separately.
- Easier conversion. Switching to another legal form, such as a BV, becomes smoother.
- Continue upon change. The company remains the same entity, even if the composition of partners changes.
Liability: what is changing?
Joint and several liability will not disappear, but will have a different order and clearer boundaries:
- The company first. From now on, creditors will first address the company itself. Only if the company is unable to pay do the partners come into the picture.
- Subsequently, jointly and severally. If it comes to that, each partner remains jointly and severally liable for the full amount.
- Five years after withdrawal. Anyone who withdraws remains liable for debts from their period for a maximum of five years. After that, the liability ceases.
- Protection for new partners. An incoming partner is protected against claims that already existed prior to his admission.
- Limited Partnership: participating without risk. The limited partner will soon be allowed to perform certain actions on behalf of the partnership without immediately losing their limited liability.
Continue with one partner
Currently, a partnership must in principle dissolve as soon as only one partner remains — for example, following the departure or death of a partner. Under the new law, this is not required immediately. The remaining partner is given time to continue the business or find a new partner, without the whole thing collapsing immediately.
What does this mean for existing businesses?
Do you currently have a general partnership, professional partnership, or limited partnership? Then there is no need to panic. Two important points:
- No name change required. Existing businesses do not need to change their name. This saves costs and hassle with stationery, invoices, and contracts.
- Transitional law. A transitional arrangement will be introduced to determine how existing companies fall under the new rules. The details of this will become clear as soon as the law is final.
It is wise to take a critical look at your general partnership or professional partnership agreement in advance. Agreements regarding entry and exit, liability, and continuation upon the departure of a partner will become more relevant than ever under the new law.
When does the law take effect?
The Partnership Modernization Act is still in preparation. There is currently no fixed effective date. The act is still going through the legislative process; only after that will an implementation date and the associated transitional provisions follow. Keep an eye on announcements from the Chamber of Commerce and the central government if you are considering a major step (such as a conversion or a new partner).
What can you do right now?
- Check your collaboration agreement. Are the agreements regarding liability, contributions, and withdrawal up-to-date and clear?
- Map out your assets. What belongs to the business and what belongs to the partners personally? Legal personality makes that distinction more important.
- Reconsider the legal form. Are you unsure whether to choose a public limited company (OV), a limited partnership (CV), or a private limited company (BV)? Calculate the tax implications before you decide.
- Plan major changes consciously. A conversion or accession may become simpler under the new law — sometimes it pays to wait.
Honest recommendation
For most general partnerships and professional partnerships, nothing changes in the short term — the law is not yet in place, and you will not need to change your name later on. So do not convert your structure now “just because you have to.” That is not necessary. What does pay off: ensure your partnership agreement is in order, as the agreements regarding liability and withdrawal are becoming particularly important. If you are considering converting to a private limited company (BV) anyway, it may be worthwhile to review that separately — not because of this law, but because of liability and taxation. Are you unsure about your situation? Then have your general partnership or professional partnership agreement reviewed; it is a small investment that will prevent a lot of disputes later on.
Read also: Converting a VOF to a BV, partnership agreement and what is a BV.
Frequently Asked Questions
A new law that replaces the outdated law from 1838 for the general partnership (vof), limited partnership (cv), and professional partnership. The general partnership and professional partnership will merge into a single legal form — the public limited company (ov) — and both the ov and the CV will acquire legal personality. The law is still in preparation.
There is no fixed effective date yet. The law is still going through the legislative process. Only after that will an implementation date and transitional provisions follow. Keep an eye on the Chamber of Commerce and the central government if you are considering a major step.
As separate legal forms, they do: they merge into the public limited company (ov). The distinction between profession (maatschap) and business (vof) is abolished. The limited partnership (CV) continues to exist as a separate legal form for silent lenders.
Joint and several liability remains, but creditors first approach the partnership itself. Only if the partnership is unable to pay do the partners come into the picture. After leaving, you remain liable for a maximum of five years; new partners are protected against older debts.
The partnership becomes an independent legal entity, separate from the partners. It can own assets in its own name (such as business premises) and enter into contracts. Consequently, the entry and exit of partners and the conversion to a BV become simpler.
No. Existing companies do not need to change their name. This saves costs and adjustments to stationery, invoices, and contracts. Transitional provisions will be introduced to regulate how existing companies fall under the new law.
Check if your general partnership or professional partnership agreement is up to date, map out the distinction between business and private assets, and reconsider your legal form if you were already in doubt. Plan major changes such as conversion or joining deliberately — under the new law, these are sometimes simpler.
