Foundations

Do you have capital you would like to use to achieve a specific social or societal goal? Examples might include nature conservation, the promotion of culture, or helping those in need. In such cases, Dutch law enables you to opt for a foundation (Dutch stichting) as the legal form. But how do you go about establishing a foundation? How should it be structured, and what do you need to know about liability?

How to establish a foundation
A foundation is established by notarial deed. In the deed, you declare that you are creating the foundation and adopting its articles of association. You can establish a foundation on your own or with others. A legal entity (a private limited company, for instance) can also establish a foundation. The foundation’s articles of association state:

• the foundation’s name, with the word ‘foundation’ or ‘stichting’ as part of that name;
• the foundation’s purpose;
• the procedure for appointing and removing directors and for making decisions within the foundation;
• the foundation’s place of establishment;
• what will happen to the money if the foundation is dissolved.

The articles of association will generally also contain rules about internal organisation. If you want to amend the articles of association, you will once again need a deed drawn up by a civil-law notary. You must enter your foundation in the Chamber of Commerce’s business register.

Foundation structure
Foundations have a board rather than members. Business activities may form part of a foundation but any profits from these must be put towards funding its purpose.

A foundation’s directors are sometimes salaried employees, but usually they receive only expenses. If a foundation has Dutch ANBI status (which means it is a public benefit organisation with at least 90% of its activities focused on the public good), its directors must not be salaried employees. However, a foundation with ANBI status can generally employ staff.