All articles · 2026-09-02 · Taxation

From sole proprietorship to company? Don't leave your accumulated value behind

You spend years building clients, reputation, and processes. What happens to that when you set up a company? About goodwill, valuation, taxation, and financing during the transition.

By Jan Hermans, CEO & founder of Lyff.

From sole proprietorship to company? Don't leave your accumulated value behind

You start as a self-employed person. You build a client base, make a name for yourself in your sector, develop knowledge and processes, and generate turnover year after year. A few years later, you set up a company.

But what happens to the value you've built up in your sole proprietorship all those years?

It doesn't just disappear. Part of it can be goodwill. And when you correctly structure the transition to a company, that goodwill can play an important role in the valuation, financing, and taxation of that transition.

What is goodwill?

A business is often worth more than what you see on the balance sheet. A computer has a value. A car has a value. Machinery, inventory, and buildings can be valued.

But what is a well-developed client portfolio worth? Your reputation? Your trade name? Your organization? The knowledge and processes that ensure clients keep coming back? This intangible economic value can translate into goodwill.

Goodwill thus represents the value that can be present in addition to the separately identifiable assets of a company and that results, for example, from:

In a sole proprietorship, such internally generated goodwill is generally not recorded as an asset on the balance sheet. However, that does not mean that there is no economic value present. And that is precisely what becomes interesting when you transfer the activity to a company.

From sole proprietorship to BV (private limited company): what exactly do you transfer?

A sole proprietorship is not simply "converted" into a BV (besloten vennootschap [private limited company]) legally. In practice, you set up a company, and the existing activity is wholly or partially transferred to that company.

Tangible assets can be transferred, but also intangible elements such as client relationships, trade name, organization, know-how, and goodwill.

For example, imagine you have built a successful sole proprietorship as a consultant for several years. You have recurring clients, a recognizable name, well-developed processes, and an activity that is structurally profitable. You then set up a BV that continues this activity.

Then a crucial question is: what economic value does that BV actually take over? The answer does not have to be zero just because that value was never on the balance sheet of your sole proprietorship.

Selling goodwill to your company

When there is indeed transferable goodwill, it can be transferred to the new company under certain conditions. In a sale, the BV buys that goodwill from you as a natural person.

Suppose a professionally substantiated valuation comes to €150,000 in goodwill. Simplified: you as a natural person sell goodwill for €150,000 to your BV. This potentially has three different consequences.

1. You realize a private capital gain

The transfer of goodwill can lead to a taxable cessation capital gain for you as a natural person. An important nuance must be made immediately here.

It is not correct to assume that the entire goodwill can automatically be taxed at one fiscally advantageous rate. For cessation capital gains on certain intangible fixed assets, a separate tax regime exists under certain conditions. Its application depends, among other things, on the fiscal history of the activity and the net profits or benefits of previous years.

A portion of the realized capital gain may therefore, in certain circumstances, still be subject to the ordinary progressive tax rates. The concrete fiscal calculation must therefore be made before the transfer.

2. The BV can incur a debt to you

This aspect is often forgotten. When your BV buys the goodwill from you and does not immediately pay the full selling price, a debt of the company to you arises in principle.

With a selling price of €150,000, a claim from you on your company can therefore arise — depending on the concrete agreement and payments. This is fundamentally different from salary or dividend.

When the company later repays a real existing debt, the repayment of the principal amount itself is not a dividend or remuneration. Of course, the underlying sale must be real, the price defensible, and the legal, accounting, and tax conditions must be correctly observed.

Goodwill can therefore not only be a tax issue but also an important part of the financing structure when transitioning to a company.

3. The BV acquires an intangible asset

On the other side of the transaction, the company records the acquired goodwill in its accounting, provided that the applicable conditions are met. The acquisition value is then depreciated according to the applicable accounting and tax rules over a defensible economic useful life.

These depreciations can reduce the company's taxable profit for several years. So you get an interesting interplay:

But precisely because multiple tax effects converge, the entire operation must be viewed as a whole.

How much is goodwill worth?

This is the core of the matter. You cannot simply decide: "My client base feels worth €300,000 to me, so I'm selling it to my BV for €300,000." The valuation must be economically substantiated.

Depending on the type of business, factors such as the following can be considered:

Valuation methods can, among other things, start from future cash flows, profitability, or relevant market multiples. Which method is suitable depends on the company.

A valuation is therefore not a calculation where the same multiple can be applied to every entrepreneur. The method and the parameters used must align with economic reality.

Is all accumulated value also transferable goodwill?

No. And this is particularly important for consultants, medical professionals, and other liberal professions.

Suppose patients or clients come exclusively to a specific doctor, consultant, or architect because of his or her personal reputation and expertise. Then the question arises how much of that future earning capacity can actually be transferred to the company.

You must therefore distinguish between the value of the company and the value that is exclusively linked to the person of the entrepreneur. The more person-bound an activity is, the more important this analysis becomes.

A client base, trade name, organization, personnel, processes, contracts, or other transferable elements can represent economic value. But you cannot simply consider every future euro of turnover as transferable goodwill.

An example

Suppose: Sarah has been working as a self-employed consultant for six years. Her activity has:

Sarah wants to conduct her activity through a BV from now on. Instead of just setting up a BV and sending all new invoices from that BV starting tomorrow, she first investigates what economic value her existing activity has built up and what part of it is transferable.

A professional valuation, for example, shows that €120,000 in transferable goodwill is defensible. Then it must be investigated:

Only then will Sarah know if the operation is actually interesting. The valuation alone therefore says nothing about the ultimate benefit.

When is goodwill less interesting?

Goodwill is not a tax trick that must be applied to every transition to a company. There can be good reasons not to use the technique or to use it only partially. For example, when:

The goal is therefore not to value goodwill as high as possible. The goal is to determine the correct value and then calculate whether a transfer is financially and fiscally sensible.

When can a ruling be interesting?

For significant amounts or situations where uncertainty exists about the valuation or tax treatment, a preliminary decision — a ruling [ruling] — can be considered. This allows certainty to be requested about certain tax aspects of the proposed structure before the operation is carried out.

However, a ruling does not replace a sound valuation or case build-up. On the contrary: the larger the amount, the more important it becomes that the economic reality behind the transaction is demonstrable.

The mistake you especially want to avoid

The biggest mistake is not necessarily that you value goodwill too highly. It can also be that you don't think about it at all.

You may have worked on an activity for five, ten, or fifteen years. You have attracted clients, built a reputation, developed systems, and created recurring turnover. Then you set up a BV and let that activity simply continue from the new company without further analysis. In that case, you may never have examined an important asset.

This does not mean that every starter with a BV must sell goodwill. It does mean that someone who transitions from an existing and profitable sole proprietorship to a company should at least ask this question: "What value have I built up privately — and what happens to it when my company takes over the activity?"

Goodwill is just one part of the transition

The choice to move from a sole proprietorship to a company should ultimately never revolve exclusively around goodwill. Other questions also play a role:

That is why, at Lyff., we prefer to view a transition to a company as one financial, fiscal, and legal plan. Not: "How much goodwill can we create?" But: "What value have you built up, how do we transfer it correctly, and how does that fit into your total financial plan?"

Frequently Asked Questions

Can every self-employed person sell goodwill to their BV?

No. There must actually be economic and transferable value present. Moreover, its valuation must be sufficiently substantiated.

Is the selling price of goodwill entirely net for me privately?

No. The transfer can generate a taxable cessation capital gain. The specific tax depends on the individual situation and the applicable tax rules.

Is goodwill always taxed at 33%?

No. That is too simplistic. For certain cessation capital gains on intangible assets, a separate rate may apply under certain conditions, but its application is limited and depends on the specific circumstances. A portion may therefore be taxed at the ordinary progressive rates. In specific situations, other rates may also apply.

Can my BV depreciate goodwill?

Acquired goodwill can be processed and depreciated as an intangible fixed asset under certain conditions. Both the valuation and the depreciation period used must be justifiable from an accounting and tax perspective.

Can my BV repay the goodwill to me later?

In a real sale, a debt from the company to the seller can arise. The repayment of the principal amount of a real debt is, in itself, something different from a salary or dividend distribution. The original transaction, valuation, and accounting treatment must, of course, be correct.

Do I need to apply for a ruling?

Not necessarily. For larger amounts or when there is uncertainty about the valuation or tax treatment, prior tax certainty (ruling [ruling]) can be particularly valuable.

Are you considering the transition from sole proprietorship to company?

Then don't start with the question of how much tax you can save with a BV. Start one step earlier: what have you already built up today? Because clients, reputation, processes, and recurring income may not be on your balance sheet, but they can indeed represent value.

A good transition to a company therefore begins with an analysis of the existing activity, the transferable value, and the fiscal and financial consequences of the various options. Only then do you decide what you transfer, at what value, and in what way. So don't leave years of accumulated value behind because no one asked for it.

This article provides general information and does not constitute individual tax, legal, or accounting advice. The valuation and tax treatment of goodwill are highly dependent on the specific situation. Therefore, have any proposed transfer assessed beforehand by your advisor at Lyff. and the involved fiscal, legal, and accounting advisors.

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