Knowledge base

Transfer of shares: how does it work under Dutch law?

After a number of years, a shareholder may leave the private limited company, or a new shareholder may join. The transfer of shares always goes through a Dutch notary. If you arrange this through FIRM24, fortunately you do not have to physically visit the notary. Besides the notarial transfer of shares, parties can also draw up a purchase agreement for the transfer. This is a contract you can enter prior to delivery, to set out things like warranties and payment arrangements. The shares do not actually transfer to the buyer’s name until the notarial transfer of shares has been completed. Even though the notary will ensure that everything runs smoothly, it is also important for you, as an entrepreneur, to have a basic knowledge of all the steps required for a proper transfer of shares.

The process before transferring

The process of a transfer of shares involves a number of steps. To make a transfer of shares legitimate, these are the steps an entrepreneur need to take:

  1. Orient to potential buyers.
  2. Drafting and agreeing the terms and purchase price of the shares.
  3. Signing the purchase agreement.
  4. Visit the notary to start the notarial share transfer.
  5. Notary approval of draft deed and legislation.
  6. Passing of deed and processing at the Dutch Chamber of Commerce.

When these steps have been completed, a legitimate share transfer has taken place.

Why should I draw up a purchase agreement for the transfer of shares?

A purchase agreement is drawn up when agreement is reached on the terms of transfer. This agreement must be signed by both parties. The new owner of the shares basically takes over all rights and obligations associated with the shares, such as voting rights and profit rights. The actual transfer takes place at the notary, by means of a deed transfer of shares. The purchase agreement will include the following:

  • The cost of the shares.
  • Whether the shares will be paid for in one payment or (if possible) in installments.
  • From what moment (date and time) the shares being delivered are for the account and risk of the buying party.
  • Conceivable further guarantees regarding the company’s balance sheet guarantees concerning the transferred company.

With the transfer of shares, the private limited company is also transferred. If the board resigns immediately after the transfer of shares, regulations for this too are usually included in the notarial deed. On occasion, a dispute resolution scheme is additionally included. This dispute settlement means, for example, that if there is a dispute afterwards this dispute will be settled via a dispute settlement.

hand and paper

Selling my own shares to my business partner and the minimum value for a share

When you, as an entrepreneur, want to leave a bv, the following question may arise: How does it work if I want to exit the private limited company and sell my own shares to my business partner? When there are multiple shareholders present in the private limited company you need to check your own drafted Articles of Association for share transfer restrictions. The main rule under these provisions is that the current shareholders are entitled to buy the shares first before you offer them to third parties. There are exceptions to this, but this must be stipulated in your Articles of Association. Dutch law states that shares must be sold at fair value upon transfer. This means that your shares may therefore not be transferred for a symbolic amount. During the notarial process, the notary checks whether the value of shares is correct.

Transfer of shares and taxes in the Netherlands

There are two situations that can be considered when selling shares. The first situation is that you hold the shares in the private limited company as a natural person. Situation 2 is that your holding company holds the shares in the private limited company. In both situations we assume that you own at least 5% of the shares.

Tax situation 1

If you hold the shares as a natural person, the sale profit will be taxed directly in box 2. The rate from substantial interest (box 2) is 26,9% in 2023.

Tax situation 2

If you hold the shares of the private limited company through your personal holding company, you make use of the ‘participation exemption’. This scheme stipulates that the profit on the sale of shares is released into the holding company untaxed. So you do not owe corporate tax on it. So you use the holding company as an untaxed ‘piggy bank’. It is therefore always advisable to set up a personal holding company if you ever intend to sell (part of) the private limited company. 

What is the notary's role in a transfer of shares?

Typical for the private limited company in the Netherlands (BV) is that not just anyone can sell or buy shares. This has to be done via a notarial deed. The civil-law notary has a supervisory role. This controlling task involves a number of factors. These factors include the purchase price of the shares and identification of all shareholders. The purchase price of the shares must always be a fair value (as mentioned earlier). This is stipulated by law in the Netherlands. Thus, shares may not be transferred for a symbolic amount. The notary must take this into account when transferring shares, Therefore, a substantiation of the purchase price, signed by an accountant, is always required. Besides the auditing function of the notary, he or she also draws up the draft deed if transfer of shares. After the draft deed is approved by the shareholders, an appointment is made for the identification of all shareholders and the signing of the powers of attorney. Identification of all shareholders is required by law.


What does Firm24 have to offer me in a transfer of shares?

For a fixed fee, we offer you advice throughout the process. Furthermore, we provide a quick and practical process through one of our partners. So you do not have to physically visit the notary, for example. Are you in search of more information on the transfer of shares? Schedule a free consultation with one of our advisors!

Published on 6 July 2023
Adam Cambridge linkedin
Adam is our English content writer and studies International Business Law at Leiden University

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