In practice
Collaboration often starts on a practical footing. You serve clients together, share an office and costs, or present yourselves to the outside world as a team. A contract seems unnecessary, because things are going well – until a dispute arises or a creditor comes knocking. It may then turn out that, legally, your collaboration is a partnership under Dutch law (maatschap). Not because you agreed on it, but because of the way you have actually worked together.
The legal point
Under Dutch law, a partnership (maatschap) arises when two or more parties each contribute something – work, money or resources – with a view to sharing the resulting benefit. No contract is required, and the label you give your collaboration is not decisive. The courts look at how you actually work together: do you both contribute something, do you share profits and costs, and is there a degree of organisation and continuity? How you present yourselves to the outside world also counts, for example a single name, one website or joint invoices.
The maatschap should not be confused with the general partnership (vennootschap onder firma, vof). Both are partnerships without legal personality, but they are distinct forms with partly different rules. A vof exists where the partners run a business together and present themselves to the outside world under a single, shared name. Where there is no shared name, or where the partners practise a liberal profession – such as lawyers, doctors or accountants – the collaboration is a maatschap.
If your collaboration is regarded as a maatschap or a vof, this has consequences:
- Towards clients and suppliers. You may be held personally liable for your share of debts that your partner incurred on behalf of the collaboration, provided your partner was authorised to do so. If your collaboration qualifies as a vof, you are liable for the full amount.
- Between you and your partner. Your partner may claim a share of the profits and of what you have built up together, and may end the collaboration and demand a settlement of accounts. If nothing has been agreed on how to divide things, the statutory rule applies: division in proportion to each partner’s contribution. That may be very different from what you had in mind.
A bill has been in preparation for several years that would abolish the distinction between the maatschap and the vof and replace both with a single new form. The bill has not yet been passed, and when and in what form it will take effect remains unclear. Until then, the current rules apply.
What does this mean for business owners?
Working together without clear arrangements means leaving it to a court to decide, after the event, how your collaboration was structured. Anyone who does not want a partnership has an interest in making clear – on paper and in practice – what the collaboration actually is, for example an assignment between two self-employed professionals. A court will then look at factors such as invoicing, the name and branding used externally, and the registration with the Dutch Chamber of Commerce (KVK).
Bear in mind that even a collaboration that is properly documented on paper can grow into a partnership if, in practice, the parties start working differently from what was agreed.
Those who do want to run a business together can choose between a partnership, a general partnership and a private limited company (bv). Each structure raises questions about profit sharing, authority and what happens if the parties part ways.
There is also another side to this. Is the collaboration under strain, and have you invested a great deal without anything in writing? In that case, the fact that a partnership has come into being may actually work in your favour. It may entitle you to your share of the profits and of what was built up together, such as clients and goodwill.
Questions for business owners
Do you work together with another business owner? Then the following questions are relevant:
- Have we set out in writing what our collaboration is – and what it is not?
- Do we present ourselves as one business, with a joint name, website or invoices?
- Do we share profits, costs or clients, and have we agreed how?
- Does our registration with the Chamber of Commerce reflect how we actually work together?
- Have we agreed what happens if one of us wants to stop?
In doubt about any of these questions? Then now is the time to have your collaboration reviewed from a legal perspective.
In conclusion
It is not the contract but the practice that determines whether you have a partnership. Knowing this allows you to limit the risk – and, when it matters, to make the most of the opportunities.
Contact
Would you like to know where your collaboration stands legally? Feel free to contact us on +31 20 800 64 00 or at info@acginter.com.
