CERTIFICATES (STAK)

Note: While the following structure of issuing certificates via a STAK is only available in the Netherlands and Belgium (private stichting) it might be interesting to read further, as this structure allows for an investment based on market valuation while still adhering to steward-ownership principles.

If a steward-owned company wants to offer equity on the public market – allowing investors to benefit from valuation increases while preserving its autonomy – there are a few viable approaches. One option is to issue voting minority shares, ensuring investors have a financial stake in the company without gaining control. Another is to issue non-voting economic shares, which grant financial rights without any decision-making power. However, making equity broadly accessible – especially when structured without voting rights – can be both complex and costly. If the company opts not to trade on the public market but still seeks a widely accessible equity investment structure, the available options become even more limited.

A well-established solution in the Netherlands and Belgium is the issuance of depositary receipts (certificates) to investors. Unlike mezzanine capital instruments (such as profit participation rights), depositary receipts are pure equity (as far as we understood!), meaning investors enjoy the same financial benefits as shareholders while the company retains control.

The key mechanism enabling this structure is the Stichting Administratiekantoor (STAK) – a specialized Dutch legal foundation designed to hold company shares and issue depositary receipts in exchange for investments. When using a STAK structure for investing in a steward-owned company or in a steward-ownership aligned way, two share classes are created:

• Voting shares – Issued directly to the steward-owners (outside the STAK).

• Economic shares – Issued to the STAK, which then issues depositary receipts to investors in exchange for capital contributions.

The STAK serves as a pass-through vehicle, meaning all dividends and financial returns from the company flow directly to the depositary receipt holders. However, because the STAK holds the shares on behalf of investors, it acts as a buffer, ensuring that governance remains in the hands of the steward-owners. This setup allows investors to receive dividends and other financial benefits without influencing company decisions. The terms for buyback price and timing can be defined in the subscription agreement for the depositary receipts, subject to any restrictions in the company's governing documents. Typically, the STAK is managed by the company itself or by board members appointed by its management. If needed, the STAK’s board can decide to dissolve the foundation, at which point depositary receipts are annulled and the underlying assets are transferred to the certificate holders.

As it is relatively easy to set up a STAK structure and due to its lower transaction costs when issuing and trading depositary receipts (no notary is required as opposed to when issuing or transferring shares), the structure is frequently used, also by companies not originally based in the Netherlands. The Belgian jurisdiction offers a similar structure called private stichting. Because of its flexibility and its nature, a STAK structure can be used for many different types of financing structures, i.e. crowdfunding/investing rounds with redeemable shares but also for other forms of equity financing. It is especially useful for financing rounds with many investors who each contribute minor sums since transaction costs will be much more limited than if actual shares are issued, and the so-called meeting rights (rights to attend shareholders meetings) which by law need to be extended to each actual shareholder, can be excluded for holders of depositary receipts (making for a less crowded and more efficient decision-making process at the general meeting of the company).