Bjorn Veltkamp, tax specialist at BDO Accountancy, Tax & Legal B.V., explains how to approach the process of aligning your structures.
You need more than a fantastic idea and a business plan for a successful business. Because as soon as you knock on the door of the Chamber of Commerce, they want to know what the legal form of your company is. In order to make a good choice, it is important that you have thought about the fiscal, legal, and administrative structure of your company. Bjorn Veltkamp, tax specialist at BDO Accountancy, Tax & Legal B.V., explains how to approach this process.
Before you get started, it is good to know that all three structures are interrelated. Bjorn explains: “The choice you make in the legal form affects your tax options, as well as the administrative obligations. The most important thing is that you are aware of this and make appropriate choices. It is not a one-size-fits-all scenario where you can choose a combination from the shelf. It always depends on your company's facts and circumstances, so it is tailor-made.”
Start with your business plan
With tons of options, where do you start? “At the origin of your company,” says Bjorn. “Namely, your business plan. Make sure it serves as a steady foundation, and then look at it from legal, tax, and administrative perspectives. What potential legal risks are there? What types of taxes may you be faced with? And finally, what costs and revenue streams do you expect? Ultimately, you want your structure to relieve you of your worries and, at the same time, offer you the space to take advantage of all opportunities. For example, if you have a general partnership and an investor comes knocking who would like to buy shares, then that is not possible. In such a case, your structure limits you instead of helping you.”
Step-by-step
With every choice you make, it is important to consider the consequences of that choice. It can then be difficult to maintain an overview. “An advisor can help you with this,” says Bjorn. “They know better than anyone how the different structures relate to each other and can help you fine-tune your structures to fit together seamlessly. Then you get a situation that works exactly for your company.”
Timely adjustments and repairs
The advice is, therefore, to start setting up your structures as early as possible. Bjorn: “Repairing afterward takes much more time and is often associated with higher costs. So make sure you take your time initially; This (time) investment pays for itself in spades.” It may happen that you have already made some progress with your company and are unsure whether the chosen structures still suit your organization. The summer period is often a time when you can re-examine your strategy. “Take the time to evaluate your current legal, tax, and administrative structure, possibly with an advisor. Then you can get off to a good start again after the summer.”
Ready to work on your structures, but could you use a little help? Contact BDO.