What is 'N.V. (Naamloze Vennootschap)'

N.V. is an acronym for the Dutch phrase "Naamloze Vennootschap," which is the equivalent of a public company.  N.V. is used in the Netherlands, Belgium, Suriname, the Dutch West Indies, Indonesia, Curacao, St. Maarten, and Aruba.  Naamloze vennootschap means "nameless venture," which is befitting since the shareholders in a public company can maintain anonymity.

BREAKING DOWN 'N.V. (Naamloze Vennootschap)'

In an N.V., two or more shareholders invest capital. Two spouses may incorporate an NV, provided the memorandum of association does not conflict with the matrimonial regime. However, naming of the company after any of its partners is not allowable.

Establishing an NV requires the appointment of three or more directors. If the incorporation is by two founders or there are only two shareholders, the board may have two members. Because the N.V. is a legal entity, the creation of a financial plan is necessary. The opening of a  particular account in the company’s name will receive all cash contributions. In the case of contributions in kind, an auditor’s report is necessary.

The drafting of an official deed is done before a notary. The filing of articles of incorporation with the registrar must happen within 15 days of corporation creation. The registrar will then arrange for publication in the Belgian Official Gazette. 

The company enrolls in the "register of legal entities" kept at the commercial court registry. Also, the registry will assign the company an enterprise number. If the company engages in commercial activities, it registers as a trader at the Crossroads Bank for Enterprises via a business counter.

Pros and Cons of an NV

An NV is useful in protecting the identity of the investor. Because partner and shareholder liability is limited to individual contributions, personal assets are not at risk. However, the decision-making process is more complicated, and accounting obligations are more substantial than with other business structures. 

Shares are registered until fully paid up so, no outlay of cash is required. However, this will necessitate a high amount of fully invested starting capital from the point the company is incorporated. Furthermore, each share corresponding to a cash contribution must be at least one-fourth paid up.

The articles of association authorize conversion of registered securities to bearer securities. Although bearer shares are transferable, registered shares are exchangeable but may be limited. 

For example, an approval clause in the articles of incorporation requires the approval of share transfers by a company body, typically management. A preemption clause requires shareholders giving other shareholders first rights to purchase shares. An alienability clause means share transfers are limited in time and must be justified by the company’s interests.

  1. Shareholder Register

    A shareholder register is a list of active owners of a company's ...
  2. Incorporation

    Incorporation is the legal process used to form a corporate entity ...
  3. Société Anonyme (S.A.)

    Société anonyme (S.A.) is a French term for a public limited ...
  4. Bearer Form

    A bearer form is a security not registered in the issuing corporation's ...
  5. Bearer Instrument

    A bearer instrument, or bearer bond, is a type of fixed-income ...
  6. Market Value Clause

    A market value clause is an insurance policy clause assigning ...
Related Articles
  1. Investing

    Know your shareholder rights

    Common-stock owners have numerous privileges and should be vigilant in monitoring a company. Read on to learn what rights you have as a shareholder.
  2. Managing Wealth

    4 Benefits of Owing an Offshore Company

    Four reasons why you might consider incorporating offshore.
  3. Small Business

    Which Type of Organization Is Best For Your Business?

    Learn the differences between the types of business organizations so you can determine how to best structure your business for tax and liability limitations.
  4. Managing Wealth

    Keeping Control of Your Business After the IPO

    Taking a company public doesn't mean founders must completely give up calling the shots. Before the IPO, consider these tactics to keep control after it.
  5. Small Business

    Should You Incorporate Your Business?

    Find out how becoming a corporation can protect and further your finances.
  6. Small Business

    Corporate Takeover Defense: A Shareholder's Perspective

    Find out the strategies corporations use to protect themselves from unwanted acquisitions.
  7. Financial Advisor

    On The Record: Communications With The Public

    NASD Rule 2211 can make or break your career as a registered principal.
  8. Small Business

    Foreigner Starting A Business In The U.S.?

    Keep these four startup steps in mind before you do.
  1. What is the full phrase for 'GmbH', and what do the words in this acronym mean in ...

    The acronym 'GmbH', which is written after the name of the company, designates a company as private in Germany. Read Answer >>
  2. Is a private company required to show financial information?

    Understand whether a private company is required to disclose financial information to the public. Learn what is required ... Read Answer >>
  3. What rights do all common shareholders have?

    Learn what rights all common shareholders have, and understand the remedies that can be taken if those rights are violated ... Read Answer >>
  4. Who is Responsible for Shareholders Interests?

    Several parties are supposed to be responsible for protecting and managing shareholders' interests, including the company's ... Read Answer >>
Trading Center