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 figure out who the stakeholders are in your Foundation.
Legal representatives for a Foundation
A legal representative is a natural person who is authorized to act on behalf of your organization.
In the case of a Foundation, the legal representatives may be:
- A solely authorized director, or;
- Multiple directors who are jointly authorized, or;
- Attorney who is solely or jointly authorized with directors.
Ultimate Beneficial Owners for a Foundation
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:
- Beneficiaries of more than 25% of the capital, or;
- Persons with more than 25% voting rights, or;
- Persons who have effective control, based on other assets or means.
Beneficiaries of more than 25% of the capital
In a foundation, persons who are beneficiaries of more than 25% of the capital can be considered UBOs. So if your foundation has a maximum of 3 beneficiaries, then all 3 persons are UBOs of your foundation.
As an example, the Great Foundation states in its target description that the aim of the foundation is to raise money to cover the medical costs of Jessi. Jessi is the only person for whom the foundation is raising funds. In this case, Jessi is the only beneficiary of the capital and the UBO of the Great Foundation.
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.
For example, Clear Foundation has 3 directors.
- Director Leonie holds 5 out of 7 votes, which gives her 71.4% of voting rights.
- Directors Maarten and Nienke each may cast 1 vote. They each hold 14.3% of the voting rights.
That means that Leonie is the UBO for Clear Foundation because she has more than 25% of the voting rights. Maarten and Nienke are not UBOs because they each have less than 25% of the votes.
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 being the ultimate policymaker.
Let’s say that the GHJKL Group has a donor, Karim, who finances the organization. While Karim has no formal role in the organization, he still fulfills the role of an external stakeholder. Karim has effective control of the company and so is the UBO of the GHJKL Group.
Do none of these interests apply to your foundation?
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, which is usually the case for foundations with ANBI status (Public Benefit Organisation).