In the context of Horizon 2020 the term beneficiary (i.e. a "participant") is used to describe a legal entity which has signed the Grant Agreement and therefore is bound by its terms and conditions with regards to the European Union (represented by the European Commission or another funding body). The beneficiary must carry out an action or a part of an action funded under Horizon 2020. Furthermore, the term beneficiary also refers to participants that do not receive EU funding but must carry out  tasks under an action and comply with most of the obligations under the Grant Agreement. Beneficiaries not receiving EU funding are usually third country participants - that are neither from an EU Member State nor from an associated country.

On the contrary, other legal entities which participate in Horizon 2020 by carrying out some tasks in an action, but which do not sign the Grant Agreement (including entities linked to the beneficiaries) are considered as "third parties involved in an action" (Article 8 of the General Model GA - multi-beneficiary). They are not bound by the terms and conditions of the Grant Agreement and consequently, the European Union (represented by the Commission or another funding body) has no obligation vis-à-vis third parties. If necessary to implement the action, beneficiaries may use contracts and sub-contracting for the purchase of goods, works or services, in-kind contributions provided by third parties and also linked third parties carrying out tasks under an action.