Both structures have clear advantages. The best choice depends on your turnover, your level of risk and your long-term plans. In this article I explain when a sole proprietorship remains ideal, and when a BV becomes more attractive.
What is a sole proprietorship?
A sole proprietorship is the simplest and often the cheapest legal form. It is quick to set up, there is little paperwork and the costs are limited. Everything you earn becomes your personal income.
- ✔ simple bookkeeping
- ✔ low start-up costs
- ✔ ideal for freelancers and side activities
Downside: you are personally liable. If debts arise, your private assets may also be at risk.
What is a BV?
A BV is a separate legal entity. The company itself owns the assets and is responsible for its debts. Your private assets are, in principle, better protected.
A BV can be founded by one person, who may be both shareholder and director. At the same time, a BV offers flexibility to add directors or shareholders later.
- ✔ better protection of private assets
- ✔ more professional image
- ✔ interesting at higher profit levels
The flip side: there are more obligations, and the formation and management costs are higher.
When does a sole proprietorship remain the better option?
A sole proprietorship is often best when:
- your business risk is limited
- your turnover is still modest
- you mainly work as a freelancer
- you want to start quickly with minimal paperwork
When is a BV more attractive?
A BV usually becomes interesting when:
- your business grows strongly
- you plan staff or larger investments
- you want to shield risks more clearly
- you aim for more tax efficiency in the long run
In addition, a BV often makes it easier to separate company finances from private finances and to bring in partners.
Taxes: very different approaches
In a sole proprietorship, profit is taxed in personal income tax and can quickly reach higher brackets.
In a BV, profit is first taxed at corporate tax level. You then decide how much to pay out as salary or dividends, which allows more planning options.
My advice
There is no universal answer. The right moment to switch depends on figures, risks and your personal goals.
During a consultation, we review together:
- your current turnover and expected growth
- the risk level of your activities
- how much protection your family needs
- whether a switch would actually save money
This way you choose a structure that grows with your business, instead of limiting it.