Starting a general partnership with a business partner
Written by Ilias Aarrass7 min read · Last reviewed on 
Written by Ilias Aarrass7 min read · Last reviewed on If you start a business with a partner, the general partnership (vof) is the most common legal form. It is as easy to set up as a sole proprietorship, but with two or more entrepreneurs. That ease has a flip side: you are both liable with your private assets, including for each other's mistakes. This article explains how the vof works, what it delivers fiscally and what you must put on paper before you start.
What a vof is and how to set one up
A vof is a partnership of two or more partners running a business under a shared name. There is no minimum capital and no notary required: registering at the Chamber of Commerce is enough. Each partner contributes something (money, assets, labour or knowledge) and shares in the profit.
The vof has no legal personality like a private limited company. The business and the partners are not legally separated. That makes the start cheap and the administration light, but it also means creditors can claim against your private assets.
Tax-wise: each of you is an entrepreneur
For income tax the vof does not exist as a taxpayer. Each partner declares their own profit share and is independently entitled to the entrepreneur deductions: the self-employed deduction of € 1,200, possibly the starter's deduction and the 12.7% SME profit exemption. The condition is that each partner individually meets the 1,225-hour criterion.
Worked example: two partners, € 90,000 profit
- Vof profit, split 50/50
- € 45,000 per partner
- Self-employed deduction per partner
- € 1,200
- SME profit exemption 12.7% per partner
- around € 5,563
- Taxable profit per partner
- around € 38,237
Result: Both partners use their own deductions. The same profit in a single sole proprietorship would get those deductions only once
Joint and several liability: also for each other's mistakes
The biggest risk of the vof: every partner is jointly and severally liable for all business debts. If your partner closes a bad deal or makes a professional error, the creditor can recover the full amount from you, including from your private assets. That even applies to debts that already existed when you joined.
If the risk or the profit grows substantially, converting to a private limited company can become sensible. The trade-off is covered in the article sole proprietorship or bv; the same arguments apply to a vof.
The partnership contract: not mandatory, but essential
A vof contract is not legally required, but without written agreements you fall back on statutory rules, which say, for example, that every partner gets an equal profit share regardless of who works hardest. Record at least the following:
- The profit split and any upfront labour reward for whoever works more hours.
- What each partner contributes: money, assets, clients or labour, and at what value.
- Which decisions each may take alone and which require both signatures.
- What happens if a partner falls ill or becomes incapacitated.
- A continuation clause: may the other continue if a partner leaves or dies, and how is their share valued.
- A non-compete or client clause for after departure, and how you resolve disputes.
VAT and administration: one business, two returns
For VAT the vof is one entrepreneur: one VAT number, one VAT return on behalf of the business. For income tax each partner files their own return with their own profit share. Also open a joint business bank account, so the business cash flows stay separate from your private accounts.
| Sole proprietorship | Vof | Bv | |
|---|---|---|---|
| Formation | KvK registration | KvK registration | Notarial deed |
| Liability | Private, you alone | Private, jointly and severally | Limited to the bv |
| Tax on profit | Income tax | Income tax per partner | Corporate tax plus box 2 |
| Entrepreneur deductions | Once | Per partner | No, customary salary |
Frequently asked questions
Can I start a vof with my partner or a family member?
Yes, that is perfectly possible. If you both genuinely work in the business, each gets their own deductions with sufficient hours. The tax authority does check whether the profit split matches what each actually contributes.
May the profit split be unequal?
Yes. You agree the split yourselves in the contract, for instance 60/40 because one works more hours or contributed more. The split must be commercially justifiable.
What happens if my partner wants to quit?
Without agreements the vof in principle ends and must be wound up. With a continuation clause in the contract you may continue alone or with a new partner and settle the departing partner's share.
Am I liable for debts from before I joined?
Yes. Anyone joining an existing vof is also jointly and severally liable for debts that already existed at that moment. So ask to see the books before joining and record internally who bears old debts.
What does setting up a vof cost?
Only the one-off registration fee at the Chamber of Commerce; no notary is needed. Do have a proper vof contract drawn up or checked by a lawyer: that costs a few hundred euros and prevents far more expensive conflicts.
Do I meet the hours criterion working part-time?
The 1,225-hour criterion applies per partner. If you work less than roughly 24 hours a week in the business on average, you will not meet it and lose your self-employed deduction; you do keep the 12.7% SME profit exemption.
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.
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