12 July 2022

European directive allows the formation of limited liability companies online

Category: Corporate law

Under a European directive, it will soon be possible to form a limited liability company (LLC) entirely online. By introducing an electronic notarial deed, business operators will no longer be required to physically go to the notary office in the future, saving both time and money.

Although the Netherlands should have originally already realised this option as of 1 August 2021, the European Commission allowed the Ministry of Justice to postpone the implementation of the directive until 1 August 2022.

Advantages of founding an LLC online

Why incorporate online if it’s also possible in person? Forming an LLC in person simply takes more time, and therefore more money. As a company founder, you first need to make an appointment with the notary. If you’re forming an LLC together with others, they are also required to be present. That means finding a date that suits everyone. Since it will now be possible to form an LLC online, you no longer need to take this into account. Moreover, it saves you both travel time and costs.

Notarial intervention still mandatory

Although the option of forming an LLC online is new, not everything is set to change. This is because the European directive explicitly states that it does not infringe on national legislation. The regulations and processes set out in the Dutch Notaries Act remain unaffected. This means that notarial intervention is still mandatory when forming an LLC.

Notaries play a significant role in the Netherlands by ensuring that all statutory requirements are met. They also draw up the articles of association, establish this in a notarial deed, and see to the entry in the Commercial Register of the Chamber of Commerce.

How do you form an LLC online?

Drawing up notarial deeds online requires a system that connects all notaries. This system is managed by the Royal Dutch Association of Civil-Law Notaries, and must make it possible to:

  • Sign a digital notarial deed
  • Identify all parties
  • Establish an online audio and video link
  • Sign a digital power of attorney.

This means that by and large, forming an LLC online is no different than doing it in person. For business owners, the most significant difference is the fact they no longer need to physically visit the notary office, since this contact now occurs via the audio and video link. The identification of the parties and the signing of the deed are also facilitated online.

Blenheim advises business owners on forming their business

If you’re thinking about starting a company or have any questions about the information above, the lawyers in Blenheim’s Corporate Team are highly experienced in advising business operators on forming companies. We are happy to help.