TYPES OF BUSINESS ENTITIES -
In the Netherlands, we distinguish business entities which are by law acknowledged to be legal persons (“rechtspersonen”) and entities which do not have the status of a legal person. The latter category may be regarded as types of co-operation between entrepreneurs, which cooperations will mainly be transparent for tax purposes. Income tax will be levied at the level of the partners of the co-operation entity, not at the level of the entity itself. For more information about some items of Dutch tax law in relation to enterprises, see hereafter under Tax Issues. Legal persons are subjects of law and as such carriers of rights and obligations like individual persons are. The rights and obligations of non-legal persons in principle are carried by the persons or legal persons for whose account the non-legal entity is carrying on its business activities.
For example: A Dutch person and a German company form a Dutch resident partnership in marketing and selling electronic equipment. According to Dutch law the partnership is not a legal person. The Dutch person and the German company in principle are each fully liable towards third parties for the obligations of the partnership. Should the partners incorporate a Dutch company, the latter will be a legal person and exclusively liable. The partners, as shareholders and/or managing directors will not be liable, unless they bind themselves pursuant to a surety or in the event that they may have acted negligently.
Please see full Chapter below for more information.