Issuing depositary receipts and making capital contributions on shares

Issuing depositary receipts for a smart structure separating control and ownership. Lawfully certify and contribute capital—even without a bank account.

Note: At Share Council we refer in English to a certificate of a share as a depositary receipt

Establishing and Structuring a STAK (Trust Office Foundation)

A Trust Office Foundation (STAK) is typically established with the purpose of holding shares in a private company and issuing depositary receipts for those shares to the ultimate beneficiaries. The STAK thus acts as an intermediary between the company and the depositary receipt holders.

Key Characteristics of a STAK:

• The foundation is non-profit.

• The board of the STAK exercises the voting rights attached to the shares.

• Depositary receipt holders have economic rights (such as dividends), but usually no voting rights in the general shareholders' meeting of the company (BV).

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A Legal Structure Without a Bank Account: Capital Contribution via Third-Party Loan

Below is a step-by-step explanation of how a STAK can be used to structure the certification of shares without having a bank account, using a loan from a third party for the required capital contribution, in compliance with Section 2:207(2) of the Dutch Civil Code (DCC).

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1. Establishment of the STAK

The STAK is formed through a notarial deed of incorporation, which includes:

• The articles of association of the foundation.

• The purpose of the foundation: managing shares and issuing depositary receipts.

• The initial board of the STAK.

Required document: Notarial deed of incorporation including the STAK’s articles.

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2. Transfer or Issuance of Shares to the STAK

The company (BV) either transfers existing shares to the STAK or issues new shares to the STAK at nominal value. This is formalized through a notarial deed of share transfer or share issuance, making the STAK the legal owner of the shares.

Required document: Notarial deed of share transfer or issuance to the STAK.

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3. Capital Contribution via Loan from Shareholder or Third Party

Although the STAK does not yet have a bank account, it is legally obligated to fully pay up the nominal value of the shares it acquires. Under Section 2:207(2) of the Dutch Civil Code (DCC), the law states:

"The company may not, either directly or indirectly, lend, advance, or make funds available to a party to enable the subscription for its own shares."

This means:

• The BV may not finance the STAK’s purchase or payment for its own shares.

• There may be no circular financing, such as funding the STAK from the BV’s own resources.

Solution under this structure:

• A shareholder or third-party entity provides a loan or advance to the STAK.

• This lender transfers the full nominal amount directly to the BV’s bank account, thereby completing the required capital contribution on behalf of the STAK.

Required documents:

• Loan agreement or subordinated payment agreement between the STAK and lender.

• Payment proof showing direct deposit into the BV’s bank account.

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4. Issuance of Depositary Receipts by the STAK

Once the STAK has become the legal owner of the shares and the capital contribution has been made, it issues depositary receipts for those shares.

For example:

• The ratio could be 1 receipt per share, or any other agreed-upon proportion.

• All receipts may be issued to the BV itself, meaning the economic ownership remains with the BV (“on the shelf”) for future transfer.

Important:

Each depositary receipt represents an equal number of shares, based on the ratio of receipts issued per share (1 or more).

Required documents:

• Depositary Receipt holder register (platform Share Counil)

• Issuance statement

• Depositary receipt holder register

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5. Payment by the BV for the Receipts to the Financier

Since the STAK issues depositary receipts to the BV, the BV is required to pay the nominal value for them. However, because the STAK does not have a bank account, payment is arranged as follows:

• The BV pays the amount directly to the lender who initially funded the capital contribution for the STAK.

• This serves to settle two obligations:

  1. The BV must pay the STAK for the depositary receipts.

  2. The STAK must repay its loan to the financier.

  3. Direct payment from BV to the financier fulfills both.

This is documented as a settlement of mutual obligations.

Required documents:

• Payment proof from BV to lender

• Settlement agreement or acknowledgment of direct payment

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Dividend Distribution Without a STAK Bank Account

Even without a bank account, the STAK can fulfill its administrative function. When the BV declares a dividend:

• The economic right to dividends belongs to the depositary receipt holders.

• The BV may pay the dividend directly to the depositary receipt holders, as long as a current and accurate register exists.

• The STAK does not need to act as intermediary in the payment flow, only in the administration.

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Legal Clarification: Capital Contribution Obligation (Section 2:207(2) DCC)

The requirement for paying up shares upon issuance is a legal obligation under Section 2:207(2) DCC. This provision is designed to protect a company’s capital and prevent fictitious equity.

Key implications:

• The contribution must be actual and verifiable; it cannot be a legal fiction.

• The company may not itself fund the capital contribution, not even indirectly.

• Funding must come from an independent third party or shareholder.

• The contribution must be paid into the BV’s own account, with a clear audit trail.

Failure to comply could result in personal liability for board members or invalidation of the capital increase.

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Summary of Required Documents