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Converting a general partnership (VOF) into a private limited company (BV) is arranged via a contribution — either tax-neutral or taxable — whereby each partner contributes their share in the VOF and receives shares in the new BV (or in a personal holding company) in return. The advantage: limited liability (instead of joint and several liability in the VOF), tax flexibility, and easier attraction of investors. However: the partners must first agree on the details of the transition — often the most difficult part.
The short answer
- Consultation with partners: who becomes a shareholder of what? One BV with multiple shareholders, or each a separate holding company above one operating company?
- Tax calculation: noisy or silent, per partner.
- Establishing a BV with a notary (often a holding company per partner + joint operating company).
- Deed of Contribution: General Partnership transfers to the Private Limited Company.
- Shareholders' agreement between the partners in the new structure.
Why convert?
- Limited liability. In a general partnership (VOF), you are jointly and severally liable for the debts of the company as well as for the actions of your partner. In a private limited company (BV), this is generally no longer the case.
- Tax flexibility. Holding structure per partner enables separate dividend choices and segregated asset management.
- Growth plans. Investors want shares, not general partnership shares. For exit prospects: a private limited company (BV) is virtually mandatory.
- Economies of scale. With growth (combined profit above ~€200,000), a BV generally becomes more tax-efficient.
The choice of structure
Two common options for multiple partners:
- One private limited company (BV), multiple shareholders. Simplest structure. Each partner receives shares pro rata to their share in the general partnership (VOF). Disadvantage: no separate holding companies, therefore less tax flexibility per person.
- Holding per partner + one operating company. Each partner has their own personal holding company; these holding companies jointly hold the operating company. Advantage: separate dividend distribution, separation of assets per partner. Disadvantage: higher notary fees and annual accounts.
For partners with different income preferences or wealth accumulation plans, the second route is almost always smarter. Read also why a holding company.
The shareholders' agreement
In a general partnership (VOF), a general partnership agreement was used. In a private limited company (BV), those agreements are included in a shareholders' agreement — indispensable when there are multiple shareholders. What must be included:
- Voting agreements and reserved matters.
- Dividend policy (especially relevant with different distribution preferences).
- Obligation to offer upon departure.
- Good leaver/bad leaver schemes.
- Tag along / drag along during sale.
- Deadlock mechanism in case of disagreement.
- Non-compete and non-solicitation clauses.
Indispensable — a general partnership agreement that is “cut and pasted” into a shareholders' agreement almost never works well. See what is included in a shareholders' agreement.
Tax considerations
Each general partnership partner makes their own tax choice:
- Seamless for partners with substantial hidden reserves and a long horizon.
- Noisy for partners with limited reserves or income tax losses.
The choice does not have to be the same for all partners — though it is administratively more complex. Have an accountant calculate it per partner.
How much does it cost?
- Notary: €800 – €2,500 (one BV) to €1,500 – €4,000 (holding company per partner + operating company).
- Shareholders' agreement: €750 – €2,500 with a specialized SME lawyer.
- Accountant's support: €1,500 – €5,000 for tax calculation, contribution, and administrative transfer.
- Income tax assessment on contribution without tax implications: variable.
Total often €3,000 – €10,000, depending on complexity and number of partners.
Honest recommendation
Converting a general partnership (VOF) into a private limited company (BV) is more than just a tax operation — it is also a revision of your mutual agreements. Invest in a shareholders' agreement beforehand and discuss with all partners which structure (one BV or holdings per person) suits your various plans. Almost always, a holding structure per partner is the smartest choice.
For the choice of contribution: tax-neutral contribution and taxable contribution. For the shareholder agreements: shareholders' agreement.
Frequently Asked Questions
Via contribution. Each partner contributes their share in the general partnership and receives shares in the new private limited company (or in a personal holding company). A notary handles the incorporation and the deed of contribution; an accountant manages the tax process. Usually, a shareholders' agreement is added.
In a single BV, all partners are direct shareholders; simplicity, but less tax flexibility per person. With a holding company per partner, each partner has their own personal holding company in addition to the joint operating company — separate dividend choices, segregated asset management, almost always smarter for partners.
With multiple shareholders: almost always. The general partnership agreement does not work one-to-one — a shareholders' agreement regulates mutual agreements (departure, dividends, deadlock) in a private limited company context. Indispensable for a healthy partnership.
In a general partnership (VOF), you pay income tax on profit, including profit that remains within the business. In a private limited company (BV) structure, you can leave profit within the BV (lower corporate tax rate) and transfer it to your private account later via dividends (Box 2). This is particularly relevant in cases of growth and higher profits.
Not necessarily — silent and noisy options can differ per partner. However, it is administratively more complex. Have an accountant calculate for each partner which route is most cost-effective.
€3,000 – €10,000 total for notary, accountant, and shareholders' agreement, depending on complexity. Plus any income tax assessment for a taxable contribution. It is often wise for partners to perform a shared tax calculation in advance.
Clients are informed about the transition to the BV. Existing contracts are transferred where possible. For long-term framework agreements, a formal assignment may be required. Schedule this administrative work for 4–8 weeks after the notarial contribution.
