Family foundation – founder, beneficiary and assets of a family foundation

Founder

As described in the previous post on family foundations, in order to establish a foundation, the founder must submit a declaration of establishment. However, the founder must be a natural person with full legal capacity. The declaration of establishment may be included in the founding deed or in a will.

Importantly, a family foundation may be established by several founders, unless the foundation is established by will. In such a case, the testator will be the sole founder of the family foundation.

Under the Family Foundations Act, the rights and obligations of the founder include:

• drawing up the articles of association – including the specific purpose of the family foundation,
• the right to delegate the exercise of their powers to another person in the statutes, specifying the scope of such delegation,
• no liability for the family foundation’s obligations,
• the right to submit comments, opinions or recommendations concerning the family foundation’s activities to its governing bodies,
• contributing assets to cover the founding fund of a value specified in the statutes,
• the ability to represent the family foundation within the organisation,
• the right to appoint and dismiss a member of the management board or members of the supervisory board – unless the articles of association provide otherwise,
• the right to establish a supervisory board in the articles of association,
• establishing a beneficiaries’ meeting in the articles of association,
• the right to receive certified copies, extracts, certificates and information from the register,
• registration of the family foundation in the register of family foundations.

Beneficiary

As a general rule, a beneficiary of a family foundation may be a natural person or an organisation. The beneficiary is entitled to submit comments, opinions or recommendations concerning the foundation’s activities to the governing bodies of the family foundation. The beneficiary also has the right to obtain information about the family foundation’s activities in person or through a person authorised by them, in particular to request access to the family foundation’s documents, including the articles of association, financial statements and accounting records, and to make copies and notes of these or to request explanations from the board. The beneficiary has the right to participate in the beneficiaries’ meeting, provided that such a right is granted to them by the articles of association. Importantly, a beneficiary to whom the family foundation has made a payment contrary to the law or the provisions of the articles of association is obliged to repay it.

Assets of a family foundation

The establishment of a family foundation requires the contribution of assets, and the initial fund – of a value specified in the articles of association – may not be less than PLN 100,000.

Assets contributed to the foundation by the founders are understood to mean assets contributed by the founder or their spouse, descendants, ascendants or siblings, whilst assets contributed by the family foundation are understood to mean assets contributed by other persons. The proportion is determined by the ratio of the total value of the assets contributed to the family foundation attributable to a given founder or family foundation to the total value of the assets contributed by all founders and the family foundation.

As a general rule, a family foundation shall not be entitled to return to the founder, in whole or in part, the assets contributed to cover the founding fund, unless the Act provides otherwise. This is because, in accordance with the nature of a family foundation, the family assets contributed to the foundation do not belong to its individual members, as the foundation itself is the owner; neither the founder nor the beneficiaries of the foundation are entitled to specific shares in these assets, but only to receive payments from the foundation as specified in its statutes.

The value of assets contributed to a family foundation in the form of foreign currency is converted into zlotys at the average exchange rate for that currency announced by the National Bank of Poland on the last working day preceding the date of contribution.

Author

Agata Bączkowska

Adwokat, Senior Associate

She specializes in commercial and civil law. She has gained experience in Warsaw law firms providing comprehensive services to companies and a law firm specializing in labor law. She has extensive experience in corporate consulting. She has participated in mergers and acquisitions at every stage of the process, from pre-transaction legal examination to fulfillment of regulatory requirements related to the transformation process. She prepares and reviews contracts entered into by clients and advises in cases of…

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