ABC of Family Foundation – Part II – establishment of a family foundation
The last article “ABC of Family Foundation – Part I. – What is a family foundation?” provided an introduction to the topic of family foundations [here].
Today we would like to examine the topic of the creation of a family foundation.
Step 1
In order for a family foundation to come into being, the idea must first come to the mind of the future founder. The founder must declare the establishment of the family foundation in a memorandum of association or a will in order to turn the idea into action. Both the deed and the will must be notarised under pain of invalidity.
It should be noted that a family foundation can be established by more than one founder. In contrast, a family foundation established by a will may have only one founder.
As soon as either a memorandum of association or a will is declared, a family foundation in organisation is created.
Step 2
Another mandatory task of the funder is to establish the articles of association of the family foundation. The articles of association must be drawn up in the form of a notarial deed.
The statute should include:
- name of the family foundation,
- headquarters of the family foundation,
- specific purpose of the family foundation,
- beneficiary or the way in which it is defined and the extent of the beneficiary’s entitlement,
- rules for maintaining a list of beneficiaries,
- rules, including the detailed procedure, on the surrender of rights by the beneficiary,
- duration of the family foundation, if defined,
- value of the initial fund;
- rules for the appointment and dismissal and the powers and duties of the members of the family foundation’s bodies, as well as the rules for the representation of the family foundation by the management board or by other organs of the family foundation in the cases stipulated by the law,
- entity authorised to approve the acts of the management board of a family foundation in organisation;
- at least one beneficiary entitled to participate in the assembly of beneficiaries,
- rules for amending the articles of association,
- intended use of the property of the family foundation after its dissolution, including the identification of the beneficiary entitled to the property on the dissolution of the family foundation.
Step 3
The founder must then draw up an inventory of the property contributed to the family foundation to cover the initial fund. Let’s recall that the founder contributes property to the family foundation to cover the founding fund with a value specified in the statute, not less than PLN 100,000.
Step 4
In order for a family foundation to operate efficiently, it must have its bodies – their establishment is another of the tasks of the founder. It is compulsory for a family foundation to have a management board and an assembly of beneficiaries, optionally a supervisory board.
Step 5
The penultimate step for a founder to establish a family foundation is to contribute the founding capital. If the foundation has been established by the founder in the founding deed, the founder must contribute the founding capital before the family foundation is entered in the register of family foundations.
The situation is slightly different when the founder has established a family foundation in his/her will. In this case, the contribution of the founding capital should be made within two years from the date the family foundation is entered in the register of family foundations.
Step 6
The funder’s last task will be to report the foundation to the register of family foundations. In the case of the establishment of a family foundation in a will, the registration of the family foundation in the register of family foundations is carried out by the management board. With the registration in the register of family foundations, the family foundation acquires legal personality. The register of family foundations is kept by the District Court in Piotrków Trybunalski.
In the following sections of the ABC of the Family Foundation, we will address the issues of how a family foundation works.
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