Who are the stakeholders in a Private Limited Company?

The stakeholders in your organization include legal representatives and Ultimate Beneficial Owners (UBOs). In some companies, a Pseudo-UBO might be a stakeholder. To use our services, we ask you to submit and verify some of your information about these stakeholders.

In this article, you will find examples to help you determine who the stakeholders are in your Private Limited Company.


Legal representatives for a Private Limited Company

A legal representative is a natural person who is authorized to act on behalf of your organization. In the case of a Private Limited Company, the board of directors as a whole is authorized to sign and act on behalf of your organization.

Directors may be authorized jointly (together) or independently (separately), as stated in the Articles of association or statutes. A director who is authorized independently may act on behalf of the organization on an individual basis. However, directors that are authorized jointly must co-sign with one or more other directors.


Ultimate Beneficial Owners for a Private Limited Company

An Ultimate Beneficial Owner (UBO) owns or significantly controls an organization. A company or legal entity can have one or more UBOs. Note that a UBO is always a natural person, though this person may have a direct or indirect stake in the company.

You can identify a UBO as:


Persons who own more than 25% of the shares

Any one person who possesses over 25% of the shares in your company is a UBO. This should be listed on your company’s shareholder register. 

A sole shareholder (someone who owns 100% of the shares) is only considered a UBO if the shareholder is a person, not a legal entity. What this means is that there are direct and indirect shareholder stakes that you should consider when identifying a UBO.


Example of a direct shareholder stake

Let’s say the Very Good Socks Company has 3 shareholders:

  • Ana owns 15% of the shares.
  • Bryan owns 10% of the shares.
  • Claudia owns 75% of the shares.

Claudia is a UBO because she directly owns more than 25% of the shares. Ana and Bryan are not UBOs because each of them own less than 25% of shares in the company.


Example of an indirect shareholder stake

For Almost Like Shoes BV, the sole shareholder is their parent company, Actually Socks BV. In this case, Actually Socks BV is not a UBO because only people can be a UBO. However, Dora happens to own 100% of the shares of the parent company, Actually Socks BV. This means Dora indirectly owns 100% of the shares of the subsidiary, Almost Like Shoes BV. Dora is the UBO for both Almost Like Shoes BV and Actually Socks BV.


Persons with more than 25% voting rights

A UBO can also be someone who has over 25% of the voting rights in the organisation. Usually, voting rights are linked to the amount of shares in a company, but this is not always the case. A company may choose to outline different voting rights in their Articles of Association such that a certain share gets more than 1 vote.


Persons with more than 25% economic interest

A UBO may be a person who directly or indirectly holds 25% or more of the ownership interests. These interests may include the right to distribute the assets of a company, such as profits, reserves, or surplus after liquidation.

For example, the Green, Green & Blue company has 1 shareholder, but the shares are certified. There are 2 certificate bearers of the company shares, which means that each person holds 50% of the shares. This stake grants them economic interest. Both certificate bearers are indirectly UBOs of the Green, Green & Blue company.


Persons who have effective control, based on other assets or means

Persons may be designated as UBOs if they have ownership or control of the company via means other than voting rights. Other means may include the (veto) right to appoint/dismiss board members or being the ultimate policymaker.

For example, the Purplish Light company has 7 shareholders, with no shareholder owning more than 25% of the shares. However, Elsa is the only stakeholder who attends shareholders’ meetings and takes decisions for the company. This means that Elsa has effective control and is the UBO for the Purplish Light company.


Do none of these interests apply to your company?

If your organization does not have a UBO, you should identify one or more pseudo-UBOs. A pseudo-UBO is a natural person who belongs to the senior management of an organization, like a managing director. These managers must be registered in the Commercial Register as statutory directors. They can be considered Pseudo-UBOs because they fulfill the function of a director.


What if a Trust Office Foundation (STAK) manages the shares in your company?

The examples below can help you determine who the UBOs are if the shares of your private limited company are managed by a Trust Office Foundation (Stichting administratiekantoor, STAK, in Dutch).


Example of UBOs based on STAK voting rights

In the case of Nice Nice BV, there is one director, Harry. The company shares are administered by the BAH Trust Office (STAK). The STAK is not a UBO since only a person can be a UBO. This means that Nice Nice BV has no UBOs based on share ownership. To identify the UBOs for Nice Nice BV, we have to then look at the voting rights of the BAH Trust Office

According to the Articles of Association of BAH Trust Office,  there are 3 persons with more than 25% voting rights. So based on the voting rights, these 3 persons are the UBOs of Nice Nice BV and BAH Trust Office.


Example of UBOs based on STAK economic interest

The shares of the Three J private limited company are managed by NJYV Group STAK. A UBO must be a person, so the Three J company does not have UBOs based on share ownership. Now we look at NJYV Group STAK to identify the UBOs.

According to the Articles of Association of NJYV Group STAK, there are 5 persons with 20% voting rights each. None of them are UBOs based on voting rights since they each have less than 25% voting rights. It is also stated in the Articles of Association that any profit is distributed among 2 depositary receipt holders. Both of them hold more than 25% of the profit share of the Three J company. That means that both of the depositary receipt holders are UBOs and that the STAK is also a UBO on the basis of economic interest.


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