Participating interests

Although the term participating interests generally refers a certain stake (in share The portion of registered capital of a private or public limited company
» Meer over share shares, share The portion of registered capital of a private or public limited company
» Meer over share stocks, in profit entitlement or in regards to participation), it has a specific meaning in Dutch corporate law.

The Dutch Civil Code describes when a company has participating interests. This is relevant for tax purposes.

In a nutshell, a company has participating interests in another legal person if the company (or his subsidiary) provide capital to that legal person in order to sustain a longer-term relation to serve its own activities. If a fifth or more of the prescribed capital is provided, it is presumed the company has participating interests.

Also when the company or subsidiary in the legal person bares full liability to creditors as a partner, or if the company or subsidiary is otherwise connected as a partner to the legal person to serve its own activities.