Terminating a Company with an Empty Balance Sheet in the Netherlands: Turbo Liquidation as an option

Terminating a Company with an Empty Balance Sheet in the Netherlands: Turbo Liquidation as an option

In the Netherlands, there are various ways to terminate a company with an empty balance sheet. The so-called “ turbo liquidation” is one of them. This involves a company ceasing to exist immediately upon dissolution when there are no assets. In these cases liquidation serves no purpose: there is nothing to liquidate.

This Dutch instrument is unique and can, unlike in many other legal systems, even be used when creditors remain unpaid.

However, abuse is a risk: the “left side” of the balance sheet is generally easy to “clear out”. The Dutch Temporary Act on Transparency in Turbo Liquidation (introduced in 2023) aimed to impose some restraint by requiring additional transparency obligations: accountability, notification to creditors, and filing of documents. This has moved turbo liquidation somewhat closer to the traditional form of dissolution and liquidation. The main difference now is primarily the publication requirement in a national newspaper and the one-month opposition period for creditors in traditional dissolution and liquidation.

What about bankruptcy, where the trustee also has little to liquidate if there are no assets? Recently a report was published examining the problems surrounding bankruptcies where few or no assets (proceeds) are present – the “empty estates” -,  where there is little or no financial room for trustees to perform their duties. In many bankruptcies, this appears to be the case: there is simply nothing to distribute. Trustees are then unable to perform their work, including investigation into the causes of the bankruptcy.

The research report further concludes that the financial accounting and accountability required by the Temporary Act in turbo liquidation contributes to transparency and improvement of the legal position of creditors, which are the objectives of the law. According to the report, the Temporary Act appears to contribute less to preventing abuse, but it is nonetheless recommended that the Temporary Act be extended. This has since occurred in August 2025: the Temporary Act has been extended by two years until November 2027. The playing field thus remains the same for now.

To determine which route is best for winding up the legal entity, it must be assessed on a case-by-case basis what caused the (nearly) completely empty left side of the company’s  balance sheet, as well as whether there are remaining creditors or not. If there are no creditors, or if the board cannot be blamed for the absence of any assets, then turbo liquidation is the most efficient route. If there are still substantial assets, but these are insufficient to satisfy all creditors, the advice will generally be to first reach a settlement with the creditors, with or without court approved settlement. After all obligations have been settled, the legal entity can subsequently still be dissolved through turbo liquidation. If it is not possible to reach a settlement, and when assets still exist, filing for bankruptcy will often be the only other realistic option.

Our corporate law department has protocols for these different situations. If you have any questions about the termination of a Dutch company, feel free to contact info@vantill.nl