As is generally known, the BV (private limited company) is a legal entity whose main purpose is to generate profit for its shareholders. Foundations, on the other hand, have no profit motive and aim to achieve a social, societal or idealistic goal. The Dutch legislator is currently taking the first steps towards a special type of private limited company: the BVm.

The internet consultation for the proposal for the introduction of the private company with social purpose (BVm) started last week. The intention of the legislative proposal is to provide recognition and acknowledgement of social enterprises, which belong to a BV.

Such companies may - after the introduction of the legislation - use the addition "BVm" or "B.V.m." in their name, provided that the requirements of the law are met.

The BVm will not become a new, separate company as a legal entity: the BVm will remain a legal entity with a BV as its legal form. This also means that the BVm must meet all the legal requirements that already apply to other BVs.

The purpose of the BVm is to better present social enterprises to clients, financiers, customers and other third parties. It then becomes clear that for this company, achieving social impact is more important than distributing profits to shareholders.

The starting point is that entrepreneurs are free to choose to be bound by the intended legal regulations and thus also by the rules on, among other things, profit appropriation, measuring impact and providing accountability in an annual social report.

Extensive information about the BVm can be found here.

Of course, we will keep you informed of developments regarding the BVm. Do you already have questions about the BV, BVm, foundation or other legal forms? The corporate lawyers at SPEE advocaten & mediation can help you.