The Foundation
Stichting or Foundation
A stichting or foundation is a legal entity in its own right with its own assets and liabilities. The legal concept of the stichting developed ages ago from capital being set aside for a special nonprofit or charitable purpose and was originally used by religious and welfare groups. The stichting is still frequently used for religious and nonprofit organizations. Distributions to incorporators or to those, who constitute its bodies, are not allowed, and its distributions are furthermore restricted by law to distributions with an ideal or social purpose.
The foregoing does not mean that the use of a common foundation is restricted to charitable purposes. It can be and is extensively used in structures in which the foundation is the legal owner of assets of which others hold the economic ownership. Any distributions are then neither out of its own funds nor out of its own income and are thus permissible. Also, the restriction does not apply to liquidation distributions: it is permissible to state in the articles of incorporation that upon liquidation the assets shall be distributed to e.g. the incorporator. A stichting can for example act as custodian or trustee of assets, entrusted and transferred to it for the purpose of investing, administering and managing such assets on behalf of third parties. A stichting is therefore an ideal vehicle to realize an economic transfer, without transferring control of the assets.
The principal difference between a stichting and a corporation is that a stichting has neither members nor shareholders, nor a capital divided into shares. The board of a stichting, which manages its affairs, is therefore not subject to the overall control of shareholders or members. The initial managing board is appointed at the moment of incorporation. Thereafter vacancies are filled at the sole discretion of the sitting board or by another person or body specially nominated for that purpose.
The foundation may be formed for an unlimited duration, for a certain period of time, or until a specified event occurs. The foundation can be dissolved by resolution of the board, unless the articles of incorporation provide otherwise. It is for example possible that the incorporator has the authority to dissolve the foundation.
The formation of a Stichting or Foundation
A foundation is established by notarial deed executed before a civil-law notary in the Netherlands Antilles. The Articles of Incorporation of a foundation must include the name of the foundation, including the word foundation or a translation thereof, its purpose, the first managing board and the manner how board members are appointed and dismissed, the Island Territory where the foundation has its seat, and the appropriation of the balance after liquidation in the event of dissolution of the foundation or the manner in which the appropriation shall be determined.
Assets
Unlike a company, a stichting has no capital per se, since it has no shares or shareholders. The founder of a stichting can contribute the initial assets at the time of establishment of the stichting or on any date afterwards.
Management
A Board ("Bestuur"), consisting of one or more members manages a stichting. The powers of the board are set out in the articles of the stichting. A stichting may also have a supervisory board ("Raad van Toezicht") which supervises the board in accordance with the Articles. The founder of a stichting and the members of the Board and of the supervisory board are prohibited to participate in the assets and/or profits of a stichting.
Source: Website Curaçao International Financial Services Association (CIFA)
