Is economic ownership a limited right?

1 min read
Mar 5, 2024 5:00:00 PM

In the world of business ownership and management, various mechanisms exist to structure and protect ownership rights. One method gaining increasing attention is the use of a Foundation Administration Office (STAK) in combination with Share Council. But before delving into how these instruments work and what role they play, it's essential to understand the basics of economic ownership and its scope.

Economic Ownership: A Limited Right?

Economic ownership refers to the benefits and risks associated with owning an asset, such as shares in a company, without the formal transfer of legal ownership. This means that the economic owner is entitled to the proceeds of ownership, such as dividends, but does not possess the formal legal rights that normally accompany it.

In many cases, economic ownership can be considered a limited right. Although the economic owner may have some control and benefits, the actual power and authority lie with the legal owner of the assets. This can pose potential challenges, such as a lack of control over key decisions within a company.

The Role of Share Council and STAK Share Council

Share Council provides a platform for shareholders to exercise their voting rights, even if they are only economic owners of the shares. It enables them to actively participate in decision-making processes and represent their interests, even without direct legal ownership. This allows economic owners to still influence significant business decisions.

Foundation Administration Office (STAK)

STAK is an entity that holds the legal ownership of assets (such as shares) while passing on the economic benefits to the economic owners. It acts as an intermediary structure that protects the interests of both parties. STAK can be used to exercise voting rights on behalf of economic owners while retaining legal ownership.

Synergy between Share Council and STAK

The combination of Share Council and STAK can offer significant benefits to parties involved in economic ownership. While STAK ensures legal ownership and provides protection, Share Council enables economic owners to actively participate in decision-making processes and exert influence.