When engaging subrecipients, ORA always asks: What is the “full legal name” of the entity? And, often times, we’re asked why this is so important.
Most entities, be they for-profits, other universities, or NGOs, refer to themselves in a number of different ways. For example, we might refer to ourselves as JHU, JHSPH, HBS, CCP, or Hopkins. However, when we are tasked to sign a legally binding agreement, it is signed as The Johns Hopkins University, on behalf of its Bloomberg School of Public Health, Center for [XYZ]. Why? Because the School of Public Health is not an independent legal entity. Neither is any department or Center that operates within it; all are ultimately a part of The Johns Hopkins University.
Recently, we had a subagreement request for a foreign entity with a name similar to the following: “Social Behaviour Research Institute, a specialist unit of Smith International, a division of Hudson Taylor Associates (“SRI”).” The department referred to the sub as “Smith,” as had been designated on previously executed subagreements. The subrecepient referred to itself as “SRI.” Yet we also had completed other subagreements specifically with Hudson Taylor Associates (“HTA”). So, who was actually the legal subrecipient? SRI? Smith? HTA?
In the U.S., a “unit” is typically not a legal entity – we would view a “unit” like a department or Center. An “institute” is generally not a separate legal entity. But a “division” is often a separate legal entity that happens to be created by, and related to, a parent company. Consequently, we had to dig deeper to figure out how to reference our sub. After a good bit of research, we learned that in the entities’ foreign country, although SRI and Smith each reported their own financial statements, they were both part of HTA, the parent, which was the only legal entity recognized under the local laws. As such, our subagreement was drafted with “Hudson Taylor Associates.”
Organizations may utilize a variety of monikers in the regular course of their business. A trade name can be used for marketing purposes, a shortened version of its full name or an acronym for ease of reference. It can even reference its relation to another entity. That being said, the bottom line is that, for contractual purposes, you must determine what their full legal name is. That is, the entity who shall be legally bound to fulfill and honor any obligations expressed in an agreement. What’s in a name? Turns out, it’s everything!