The importance of appointing a Company Secretary for a Dutch B.V.
If you want to set up a Dutch B.V in the near future, or even if you have already registered a Dutch B.V., it is important to understand what it means to be appointed as a Dutch B.V. director and how a company secretary can help minimize your burdens, including the very real possibility of being fined.
For those of you from Commonwealth countries, the title of “company secretary” is a familiar one. In the Netherlands, however, there is no legal requirement for a Dutch B.V.
Although there are no legal requirements, we are going to examine whether it is worth spending the money (as little as 50 Euros per month) to appoint a secretary for a Dutch B.V.
Let’s first examine the most important questions together:
What is a company secretary?
The company secretary is also known as a corporate secretary. They can be seen as a company’s internal housekeeper. They are responsible for ensuring that the statutory and regulatory requirements of a Dutch B.V. are complied with after a Dutch B.V. is incorporated.
What are the primary roles of a company secretary?
Although the role of a company secretary in a small company is different from that of a listed company, there are general responsibilities that the secretary assumes:
• Support the board of director’s functions efficiently and effectively.
• Ensure that the company complies with its legal and statutory requirements.
Why is having a company secretary pertinent to a Dutch company’s success?
Although there is no legal requirement in the Netherlands to appoint a company secretary to assist the board of directors with fulfilling compliance issues, the responsibility of a Director under Book 2 of the Dutch Civil Code and Articles of Incorporation (which is comparable to the Memorandum and Articles of Associations combined) still apply. Accounting requirements are prescribed by law, and the secretary can help with the following requirements:
• The first annual accounts MUST be filed not more than two calendar years after the formation of the company.
• Subsequent accounts MUST be filed within five months of the accounting year-end. It is possible to request an extension with the shareholders’ approval.
• Corporation income tax returns MUST be filed within 6 months of the end of the accounting year. Again, it is possible to file for a deadline extension, by means of a written request submitted to the tax authority.
• A VAT return MUST be filed at the end of the month following each quarter-end. For example, the first quarter (January to March) VAT return should be filed before the end of April. In some cases, you can apply to the tax authority to file a VAT return monthly.
It is very important to understand that non-compliance with the filing requirements within the timeframe can lead to HUGH FINES or, in extreme cases, BEING STRUCK FROM THE COMPANY HOUSE “KVK”.
It is the director who is responsible for ensuring that all the filing requirements are fulfilled under the Dutch civil code — not your accountant, bookkeeper, or tax advisor. If a Dutch B.V. is late filing a return or late making a payment, a BIG FINE will be imposed on the Dutch B.V. We have seen it many times!
If you receive such a letter from the tax authority notice, do you know how to deal with it?
Do you know how to respond immediately without further escalating the fine?
Do you wish that you had someone to take this problem away so that you can focus on profits and success?
How can you solve the problem of possible fines?
Dealing with the legal requirements and facing fines would be even more frustrating if you cannot read and speak Dutch fluently. Google Translate will not effectively help you fully understand what the legal requirements are and how you can prevent fines.
That is why the investment of just 50 Euros per month for a company secretary is well worth spending; it’s just like insurance, whereby you have peace of mind that any official or incoming letters will be dealt with effectively and appropriately.
Saving you money, stress, and time in the long-run. After one year, you can cancel the services, if you find that you no longer need the extra insurance and peace of mind for some reason.
Hiring a company secretary is the best investment you can make as a Dutch director, as it will ensure that statutory and regulatory requirements in your company are complied with. At the end of the day, it’s a small investment to make sure you properly manage your Dutch B.V. and avoid hefty fines and penalties.