Board member of a foundation, rules and duties
- KVK Redactie
- The basis
- 15 Jun 2023
- Edited 1 Mar 2023
- 2 min
- Rules and laws
You have been asked to join the board of a foundation, or you plan on starting a foundation yourself. You will have to deal with rules for foundations and rules for foundation board members. To minimise the risk of personal liability, make clear arrangements and lay them down in writing. Read up on the important rules for board members.
A foundation always has a board but it does not have members. Sometimes there is a 'Raad van Toezicht' or a 'Raad van Commissarissen', a supervisory board, but it is not mandatory.
Representation and liability
You set up a foundation at a notary's office. You lay down the articles of association in the deed of incorporation. Articles of association describe the internal rules and agreements of the foundation. The notary usually arranges the registration of the foundation in the KVK Business Register.
Avoid problems and make clear agreements about financial matters and the way you make decisions.
A foundation is a legal . This means that the foundation itself has rights and obligations. For example, the foundation is liable in case of debts. Sometimes a board member of the foundation is liable. For example, if there is mismanagement, or if the foundation is not yet registered in the Business Register.
The board implements the foundation's policies. If board members do not do that, or do not do it properly, an argument or problem can arise. Think of administration that is not correct. Or if the board makes agreements on behalf of the foundation that the foundation cannot comply with. These are examples of mismanagement. The foundation can then hold the board or board member .
Articles of association
As a board, make clear arrangements about financial matters and the way decisions are made. Put this in writing in the foundation's articles of association. This will minimise the risk of liability. There are also liability insurances for board . You are then insured for the risk of personal liability after a mistake. You thus protect your private assets.
The board may enter into contracts on behalf of the foundation. The main rule: a contract is valid only if all board members sign it. Do you want the signature of only some of the board members to be sufficient? Then put this in the foundation's articles of association.
Records and annual statement
The board must keep records and financial summaries. The board makes an annual board report, a balance sheet, and a ‘statement of income and expenditure’ (‘staat van baten en lasten’, in Dutch). This must be done within 6 months of the end of the financial year. The financial year is the period covered by a financial report.
These statements list the foundation’s income and expenses for the past year. If the foundation has only a board, the board prepares and approves the annual documents. If there is a supervisory board in addition to the board, the articles of association may state that the supervisory board must approve the annual statements. The board is obliged to keep the statements for 7 years.
In a foundation without a supervisory board, the board members can 'discharge' each other if they have approved the annual documents together. Do you receive discharge from the board? Then the board is saying that you have done your job well. As a result, the foundation can no longer hold you personally liable as a board member for the work you did for the foundation in the past year. Is there a supervisory board? Then this board gives discharge.
Registration, deregistration, and new board members
If you have been appointed board member of a foundation in the Netherlands, you must register in the Business Register at KVK. The articles of association determine for how long a board member remains in office, the legislative term. After this term, the board must either reappoint the director, or elect a new one in their place. The arrangements for this are stated in the articles of association.
There are other reasons why a person can stop being a director:
- resignation: the director does not want to remain in office;
- dismissal: if a director does not function adequately, the other board members or the supervisory board can dismiss them;
Changing board members
Report changes in the board to the Business Register as soon as possible. When doing so, pay attention to who should sign the statement. Other changes should also happen immediately. Think of a change of address, or an update to the UBO registration. Is a new treasurer starting? Let the bank know.
Are there questions?
If you have questions about foundations, call the KVK Advice Team on 0800 21 17 or read the answers to frequently asked questions.