Form a Cooperative in the Netherlands
Advantages of working in a cooperative
In case you are planning to use the advantages of cooperative work, such as pooled marketing and purchasing efforts, one of the options is to register an entity called “coöperatie” or cooperative. This form of entity is also useful if you are dealing with increasing workloads or have health problems. The other participants in the collective can handle some of your work.
Definition and types of cooperatives
The cooperative is an association concluding specific contracts with its members and on their behalf. Two of its forms are “bedrijfscoöperatie” or business cooperative and “ondernemerscoöperatie” or entrepreneur cooperative.
This type of collective works in support of the members’ interests in particular fields, e.g. advertising or procurement. A popular Dutch example of such a cooperative is Friesland Campina; it is a substantial cooperative uniting dairy farmers, where each member contributes to the collective profits.
This type of cooperative has members who work independently and may decide to collaborate on particular projects. This form of entity is suitable for persons who are self-employed and do not have employees of their own (zzp'er or zelfstandige zonder personeel). The entrepreneur cooperative allows members to work together on projects or assignments that would otherwise be too bulky for them to complete on their own. The customers also benefit from the situation by having one contact person and more certainty that the deadlines of their projects will be kept.
Please note, that all participants in common projects working in the capacity of natural (not legal) persons need to have other clients outside the project to be considered as entrepreneurs for the purposes of income tax collection (ondernemer voor de inkomstenbelasting). The distinction is important for the Customs and Tax Administration (Belastingdienst).
All members of the cooperative have the right to vote and are free to leave or enter the collective, as long as this does not jeopardize its long-term existence. Entrepreneur cooperatives are suitable for short-term or small-scale collaborative projects.
Mutual insurance companies
Companies with mutual insurance (onderlinge waarborgmaatschappij) are cooperatives whose members conclude insurance contracts between themselves and with their companies aimed at mutual profits.
Establishment and management of a cooperative
A cooperative may include two or more members. The entity is controlled by an Algemene Ledenvergadering or General Members Meeting (GMM). The GMM appoints a management board to handle the affairs of the cooperative. You will have to use the services of a Latin notary to prepare a deed for the establishment of the entity and to register it at the National Commercial Registry (Handelsregister).
The members of the cooperative cover the costs of its setup and functioning. Any generated profits are distributed with respect to the shares of the members in the general turnover of the collective. The members are free to negotiate particular arrangements with respect to profit sharing.
The collective is held accountable in its capacity of an entity, but in case its members plan to dissolve it at a time when it has outstanding debts, all of them owe equal shares. Still, liability can be excluded by establishing a limited liability cooperative (BA or beperkte aansprakelijkheid) or an excluded liability cooperative (UA or uitgesloten aansprakelijkheidcooperative).
In entrepreneur cooperatives, partners collaborating in projects carry the responsibility for their outcomes.
Cooperatives pay corporative tax (or vennootschapsbelasting) with respect to their profits. Their individual members owe income tax (or inkomstenbelasting) with respect to the income they obtain through the cooperative.
Please, refer to this article on Dutch taxes for additional information.
Yearly accounts and reports
Cooperatives are required to prepare and publish yearly financial accounts and reports.
Regular and board members of self-governing cooperatives have effective fictitious employment relationships (fictieve dienstbetrekking) with the entity. In this case, the salary deductions are the same as for regularly employed persons.
Our legal agents can help you register a cooperative in the Netherlands. Read here if you would like to explore other Dutch company types.