A Stichting (Foundation) is a non-profit legal entity typically used for charitable, educational, cultural, or community purposes. It has no owners or shareholders.
What is a Stichting?
A Stichting is an independent legal entity created for specific purposes (usually non-commercial). It has no owners; instead, it has a board of directors who manage it according to the foundation's bylaws.
Key Characteristics
- No Owners: Foundation exists for its stated purpose, not for profit
- Separate Legal Entity: Can own property and enter contracts
- Board Governance: Managed by a board of directors
- Non-Profit Status: Special tax treatment for qualifying foundations
- Permanent Structure: Can continue beyond founder's involvement
- Public Purpose: Must serve public or community interest
Advantages
âś“ Tax-exempt status possible (if qualifying) âś“ Public trust and credibility âś“ Limited liability âś“ Can receive grants and donations âś“ Perpetual existence âś“ Governance structure ensures transparency
Disadvantages
âś— Cannot distribute profits to individuals âś— Extensive compliance and reporting âś— Must maintain non-profit status âś— Limited flexibility in operations âś— Board meetings and documentation required âś— Subject to regulatory oversight
When to Choose Stichting
- You're starting a charity or non-profit
- You want to create a community organization
- You need tax-exempt status
- You're establishing a trust or endowment
- You want to ensure funds are used for stated purpose
Governance Requirements
- Board of directors (typically 3+)
- Written bylaws
- Regular board meetings
- Annual reporting
- Financial transparency
- Audit requirements (depending on size)
Tax Considerations
Qualified Stichtings may receive special tax treatment:
- Exemption from corporate income tax (if qualifying)
- Donors may receive tax deductions for contributions
- Strict compliance required to maintain status
Next Steps
→ KKF Registration Process → Resources for Non-Profits
Stichtings are excellent for community-focused or charitable work. Choose this structure only if non-profit mission is primary.