When an entrepreneur dies: what happens to the business
Written by Ilias Aarrass6 min read · Published on · Last reviewed on 
In short
When a sole proprietor dies, all rights and obligations pass to the heirs: they close, continue or transfer the business, file the final income tax return and take the place of the entrepreneur for VAT. A BV continues to exist; the shares form part of the estate.
- The municipality automatically reports the death to the KvK and the tax authorities.
- If heirs continue the business directly, the death profit may not have to be settled, subject to conditions.
- The business succession scheme requires at least three years of continuation for acquisitions after 1 January 2025.
- For a death in 2026 or later, the inheritance tax return is due 20 months after the death.
The death of an entrepreneur is first and foremost a personal loss. Yet surviving relatives often have to make quick decisions about the business: clients are waiting for their work, staff want to know where they stand and the tax authorities expect returns. This article helps heirs get an overview of what needs to happen for a sole proprietorship, a general partnership and a BV. It also shows what you as an entrepreneur can record now, so that things are less heavy for your loved ones later. If in doubt, contact a notary; the KvK also has a dedicated desk for surviving relatives (Nabestaandendesk).
The first weeks
The municipality automatically reports the death to the KvK and the tax authorities. The KvK desk for surviving relatives then contacts the family, or you contact them earlier yourself. Check the Central Wills Register to see whether there is a will. Heirs then have a choice: accept the estate unconditionally, accept it under the benefit of inventory (you are then not liable with your own money for the deceased's debts) or reject it. With a sole proprietorship that has unknown debts, accepting under the benefit of inventory is often worth considering.
To log in to the tax authorities on behalf of the deceased, you request a surviving relative's authorisation; using the deceased's DigiD is not allowed. An accountant can help; see authorising your accountant with the tax authorities.
By legal form: what happens
What happens to the business depends strongly on the legal form:
| Legal form | What happens |
|---|---|
| Sole proprietorship | Rights and obligations pass to the heirs. They close the business, continue it or transfer it. |
| Vof, cv or maatschap | Depends on the contract. Often the other partners continue the business and the heirs receive payment for the share. |
| BV | The BV continues to exist. The shares form part of the estate; the shareholders appoint a new director if needed. |
Taxes for a sole proprietorship
The heirs together file an income tax return on the profit from 1 January to the date of death. That includes the death profit: the surplus value of the business at that moment, comparable to cessation profit. If the heirs continue the business directly, they may not have to settle the tax, subject to conditions; the continuing heir then takes over the book values.
For VAT, the heirs jointly take the place of the entrepreneur, even if they stop immediately. So keep filing VAT returns for as long as you are invited to. For inheritance tax there is the business succession scheme, if you inherit the business after 1 January 2025 and continue it for at least three years. For a death in 2026 or later, the inheritance tax return is due 20 months after the death. More in inheritance or gift in your business.
With a BV
If the deceased was the sole director, there is temporarily nobody authorised to represent the BV. Many articles of association therefore contain a provision for absence or incapacity, stating who manages temporarily. If it is missing, the heirs, as the new shareholders, appoint a director at a meeting. The BV's returns then simply continue.
What you can arrange now
You make things much easier for your loved ones with a few arrangements on paper. This ties in with an emergency plan for when you are unable to work:
- A will and possibly a lasting power of attorney, through a notary
- An absence and incapacity provision in your BV's articles of association
- A continuation clause in your partnership agreement
- A securely stored overview of bank accounts, logins, contracts and your accountant
- Agreements on who might continue the business; see transferring your business to your child
Frequently asked questions
Do the heirs have to deregister the sole proprietorship with the KvK themselves?
The municipality reports the death to the KvK. The KvK desk for surviving relatives gets in touch to arrange together whether the business stops, continues or is transferred.
Who files the final income tax return?
The heirs, for the period from 1 January to the date of death, including any death profit.
How long must the records be kept?
The seven-year retention obligation also applies after death. Make sure one of the heirs looks after the records.
Sources
- Changing or ending a business on deathBelastingdienst · belastingdienst.nl
- Step-by-step plan for the affairs of a deceased entrepreneurOndernemersplein · ondernemersplein.overheid.nl
- When must my inheritance tax return be filed?Belastingdienst · belastingdienst.nl
Sources checked on
This article provides general information based on the rules known for 2026 and does not replace personal tax advice. For your specific situation, we're happy to take a look with you.
