Many restaurants in the Netherlands are not operated through a private limited company (B.V.), but through a general partnership (in Dutch: vennootschap onder firma, or in short V.O.F). This structure is accessible, flexible, and relatively easy to set up, which is why these cooperations are often built on mutual trust.
However, trust alone is not a legal safeguard. If you are considering investing in, or joining, an existing restaurant, it is essential to understand how a VOF works under Dutch law and to ensure that your position is properly documented. This can prevent costly disputes later on.
V.O.F. is not a legal entity
V.O.F. is fundamentally different from a B.V.. The latter is a legal entity with transferable shares and a V.O.F. is not. Legally, a V.O.F. is the partnership of the partners themselves. Among others a V.O.F. means that:
- There are no shares (aandelen), only partnership interests (belangen).
- Your interest is determined by your contribution (cash, assets, and or labour).
- That contribution should be recorded on your capital account in the starting balance of the fiscal year.
- An interest in a V.O.F. is not freely transferable in the way shares in a B.V. can be.
In other words, “buying 25% of the restaurant” in a V.O.F. is not the same as buying shares in a company. You are joining a legal partnership and will assume both rights and obligations.
Contributions can be more than money
Many people associate joining a VOF with a cash investment, for example €30,000 or €50,000. Under Dutch law, however, a contribution can also consist of labour.
This is particularly relevant in practice where long-term staff members are told: “If you work hard, you can become a partner later.” In principle, it is legally possible to become a partner without an immediate cash payment, provided this is clearly agreed and documented.
Avoid vague promises: proper contractual admission rights required
We frequently see situations where someone works for years based on informal promises such as:
- “Work first. We will arrange the paperwork later.”
- “You can join once the business performs better.”
If these arrangements are not written down precisely, there may be no legally effective admission as a partner. At most, there may be an informal “option” to become a partner in the future. Such an option is often difficult to enforce, especially where there are no concrete conditions, timelines, or defined rights.
If the relationship deteriorates, the person who worked hard, sometimes even made investments therein and relied on the promise, often cannot prove any entitlement to a partnership interest.
Proper admission requires proper bookkeeping and registration
A legally sound admission to an (existing) V.O.F. generally involves:
- A well established (revised) VO.F. agreement (partnership deed).
- Clear clauses on:
- who the partners are;
- what each partner contributes (money, assets, labour);
- profit and loss distribution;
- decision-making and authority;
- exit provisions and valuation (if relevant).
- Correct recording of each contribution on the partner’s capital account in the bookkeeping.
- Registration of the (new) partner with the Dutch Chamber of Commerce (Kamer van Koophandel, or KvK), unless there is a legally defensible reason to postpone this temporarily. For instance when the current work visa requires the new partner to be an employee for the duration of the visa.
If funds are paid but not booked as a capital contribution, it could cause major problems in future. The payment may later be viewed as a loan, a private transfer, or even wages, each with different legal and tax consequences.
If someone is both employee and (future) partner, clarity is essential
It is possible for someone to have an employment relationship and also have arrangements about joining the V.O.F.. In that case, documentation must be particularly precise. It should be unambiguous regarding:
- what portion is the salary;
- what portion is the profit distribution;
- when is the person considered to be a partner (effective date);
- whether profit rights apply from that moment, and under what conditions.
Without clarity, disputes can arise later about whether the person in question was an employee or a partner, and whether they were entitled to profits or only their salary.
Joint and several liability: private risk is real
One of the most important features of a VOF is joint and several liability. Each partner can be held personally liable, with their private assets, for debts of the partnership. If the VOF cannot meet its obligations, such as rent arrears, a creditor may pursue any partner personally. This makes trust important, but good agreements are also indispensable.
This is precisely why joining a V.O.F. should never be approached informally. Proper due diligence and robust agreements are not “distrust”. This is proper risk management.
Conclusion: trust is good, security is better
Whether your contribution consists of money, labour, or both, your rights and obligations should be legally secure from day one. A well-drafted V.O.F. agreement, correct bookkeeping, and proper registration can prevent disputes and protect you from unintended personal liability.
If you are considering joining a V.O.F. in the hospitality or other sectors, or if you are already working under informal arrangements and wish for better clarity, Amice Advocaten can assist with:
- reviewing and drafting V.O.F. agreements,
- structuring admission of new partners (including labour contributions),
- aligning employment and partnership arrangements,
- assessing liability exposure and risk mitigation,
- advising on documentation and registration requirements.
If you would like tailored advice for your situation, please contact our office. A brief legal review at the right moment can save significant costs and conflict later.
Amice Advocaten B.V.
phone: +31 (0) 30 2300 230
E-mail: info@amice-advocaten.nl