4.2 Introducing Dutch Equivalent of EIRL

The French business form of the entrepreneur individuel à responsabilité limitée (EIRL) was introduced in 2011. It can be described as a limited liability sole proprietorship, except that EIRL refers to the owner, rather than to his business. An EIRL is a person acting in a specific capacity. Speaking of a limited liability sole trader would be more accurate, except that the EIRL can be occupied with any sort of business, including a liberal profession. A business person can become an EIRL by registration in the appropriate public register.

The EIRL regime combines the advantages of limited liability with a maximum of flexibility, a minimum of administrative burden and an option for either the sole trader tax regime or taxation as a company. The EIRL is not a legal entity. The assets contributed by an EIRL to his business or acquired by him as such, form part of a separate fund (the EIRL assets and liabilities). As a general rule, EIRL creditors have recourse to EIRL assets only. The EIRL’s personal creditors must satisfy themselves with the EIRL’s other (personal) assets. The EIRL assets and liabilities can be transferred under a general title of succession to a successor in business or a partnership or company in which the business person may decide to participate. Some legal authors have looked into the possible concept of a one-person partnership. The EIRL has certain characteristics of such a legal concept.

This French example has inspired the author of this thesis to propose a similar legal innovation in the Netherlands. The author refers to it as a ZBA (abbreviation of Dutch zelfstandige met beperkte aansprakelijkheid, limited liability independent business person). Like the EIRL, the ZBA is a capacity in which a business person can act, not a separate legal entity. The capacity of ZBA can be acquired by registration as such in the Commercial Register. Assets acquired by the ZBA form part of a separate fund. The personal creditors of the business person concerned have no recourse on the ZBA assets. It is also proposed that the ZBA be allowed to transfer his ZBA assets and liabilities to a company or partnership in which he may decide to participate, or to a successor in business, through a procedure that can be construed as a variation to statutory demergers.