If you are an entrepreneur in the Netherlands, or if you are working as a self-employed professional, then it can be useful to collaborate with other entrepreneurs. Together you can take on bigger assignments, guarantee continuity for your clients or better focus on your specialism.
Working together in a cooperative or ‘coöperatie’
The Dutch legal system has a good solution for this, the ‘coöperatie’, or co-o-pe-ra-ti as you pronounce it. The English word is a cooperative. On the one hand it is a separate legal entity, just like the Dutch BV or a Limited Company, so it can have assets and go bankrupt. On the other hand it is a sort of association, where you can easily add members and terminate membership, and where members jointly decide about the activities in the cooperative.
The Dutch cooperative comes in three versions: the ‘Coöperatie U.A.’, the ‘Coöperatie B.A.’ and the ‘Coöperatie W.A.’. The two letters at the end designate what happens when the cooperative goes bankrupt. Only in case of the ‘Coöperatie U.A.’ the members are excluded from any liabilities, so that is the most used version.
Doing projects through the cooperative
Most groups of entrepreneurs that we help use the cooperative to work under a common name. Not the names of the individual entrepreneurs, but the (brand)name of the cooperative is communicate to the clients, and the member/entrepreneurs execute the assignments that the cooperative takes on. This can both be individual assignments, or projects that you execute as a group.
As soon a the work is done, the cooperative will invoice the client, and the members who were involved in the project will invoice the cooperative for their share. A small amount is left in the cooperative, and can be used for covering administrative expenses or can be paid out as a profit at the end of the year.
What about the tax authorities?
If you work as an entrepreneur or self-employed professional in the Netherlands and the tax authorities classify you as a ‘ondernemer voor de inkomstenbelasting’, then please be careful. You can not do all your activities through the cooperative. Apart from the invoices to the cooperative, you should also send invoices to other clients and for those activities classify as an entrepreneur who carries the risk of non-payment.
Also if you work through your own BV, you still have to take care that you execute your activities in an independent way, and that you are responsible for the results. If your working hours are closely determined, or somebody is guiding you all day, then this may be seen as fictitious employment. But this is no different than if you would work directly for a client, not through the cooperative.
The formal structure
We have created a structure how you can work in a cooperative, without much risks, and without much hassle. There are two important documents:
The articles of incorporation
The articles of incorporation, or in Dutch ‘de statuten’ are a legal document created with a deed being passed at the notary public. You can only change these articles by going back to a notary public. The articles stipulate:
- The name of the cooperative and where it is based.
- How you can become a member and how membership is terminated.
- The way the members jointly make decisions.
- How you can elect a board and what the responsibilities of the board are.
- Whether you have to pay contribution and how any profit is being distributed.
- How you can change the articles of incorporation, or terminate the cooperative.
The members agreement
The members agreement is being concluded between the cooperative and each of its members. Where the articles of incorporation are more generic, the members agreement should really be tuned on the activities of the cooperative. We have drafted an concise members agreement with the purpose of doing projects together. You can adjust this draft yourself to your own needs, only consult a lawyer if you make big changes!
Our members agreement for entrepreneur cooperatives stipulates that:
- This is a so-called ‘Wet DBA’ agreement as approved by the tax authorities. Working according to the agreement gives you the certainty that your work won’t be seen as fictitious employment.
- The members work together in projects for a client. Members will (jointly) make a proposal for the client, and then guarantee to the cooperative that they will execute the project under these conditions. Only after this guarantee (which can be an email) the board of the cooperative will bring out the proposal or sign an agreement with a client.
- Members who acquire projects for other, will be rewarded with a percentage of the project fee. Note: you can jointly decide on this percentage.
- Only when the client has paid, the members involved will be paid for their share, less a small percentage
- If the client doesn’t pay, or the client claims money back afterwards, the members involved in the project will only be held liable for the amount that would get for their work.
- Intellectual property that jointly is being generated during a project, will be made available for each of the members in the project.
- The agreement ends when the membership of the cooperative ends, but project-related obligations will continue.
The whole idea behind this agreement is that members are responsible for the work they do, but that they can’t suffer big losses due to mistakes that the other members make. With good general terms and conditions the cooperative can also reduce a lot of risk, and as a last resort the cooperative can go bankrupt. In that case the members are not liable for the debt.
Steering the cooperative
The members come together at least once a year to discuss the budget, contribution and to adopt the annual accounts. This can also the moment to confirm new members or to elect new board members.
In principle every member has one vote, but you can also differentiate in types of membership. For example you can arrange that founding members have more than one vote, or that they always keep the majority of votes.
In a cooperative with limited members, the role of the board lies more in the execution. The members set the policies, the board represents the cooperative towards third parties.
Our package for setting up an entrepreneurs cooperative
De Coöperatie expert had helped hundred of groups in setting up their coöperative. For a cooperative of entrepreneurs, with the purpose of doing projects under one common name, we have a complete package that costs you 1.290 euro excl. VAT. It consists of:
- A two-hour meeting in which we look at the activities that you want to do together and where we explain the concept that we have.
- The (standard) articles of incorporation. If necessary, we can customise these at an hourly rate. Please note that the deed of incorporation needs to be in Dutch, we are currently working a an English translation.
- Passing of the deed of incorporation with the notary public. You don’t have to visit our notary public, we can work with a power of attorney.
- The members agreement, to arrange the way you can jointly do projects. Also this is a Dutch document, for which we are working on an English summary.
- A tax manual, explaining all the specific fiscal arrangements for the cooperative. You can give this document to your bookkeeper.
For more complicated types of cooperatives, extra Q&A sessions or revisions we charge at an hourly rate.
If you have any questions, or if you want to set up a cooperative, please contact Alfred Griffioen, on +31 6 2477 6865, or email email@example.com.