In December 2022, the lower chamber of Parliament adopted a resolution introducing a new legal structure into the Polish legal system: the family foundation. What is a family foundation, and why does it matter to entrepreneurs and their families?
The Concept of a Family Foundation
The vast majority of businesses in Poland are family-owned. Under the current legal framework, owners of such businesses have limited influence over succession. They may donate or bequeath their enterprise to selected heirs, but the legal perspective typically ends with the second generation. The original owner has no formal say in the future of the company or its assets, as decision-making passes to successors. Yet private interests and business interests do not always align.
Until now, Polish law lacked sufficient mechanisms to prevent fragmentation or ensure continuity when successors were unwilling to continue the business. This led to calls from entrepreneurs for a legal solution that would facilitate succession and reconcile conflicting interests.
The family foundation is designed to build organizational structures that ensure continuity and protect assets across multiple generations. It separates business and family formally, as family assets become the property of the foundation. Its purpose is to provide financial support to the family while preserving the founder’s vision and values within the business.
Legal Definition and Purpose
According to the Act, “A family foundation is a legal entity established to accumulate assets, manage them in the interest of beneficiaries, and provide benefits to those beneficiaries. The founder defines the foundation’s purpose in its articles.”
The founder is the individual who creates the foundation and establishes its articles. Only a natural person with full legal capacity may act as founder. A foundation may have multiple founders, except when established by testament—in that case, only one founder is permitted due to inheritance law requirements.
The founder contributes assets to the foundation to fund its initial capital. Beneficiaries may include natural persons and nonprofit organizations engaged in public benefit activities. The foundation’s articles specify the founder’s intentions regarding the benefits granted to each beneficiary.
Organizational Structure
The Act provides for three governing bodies within a family foundation. Like other legal entities, it operates through a management board and may be subject to internal oversight by a supervisory board.
The management board is responsible for running the foundation and representing it externally. This includes implementing the foundation’s statutory goals and ensuring financial liquidity and solvency. The board may consist of one or more individuals appointed and dismissed by the founder.
The supervisory board may be established voluntarily by the founder, except when the number of beneficiaries exceeds 25—in that case, it becomes mandatory. Like the management board, it may consist of one or more members. The supervisory board oversees the management board’s compliance with legal provisions and the foundation’s articles. A single person may not serve on both boards simultaneously.
The third body is the assembly of beneficiaries. It is convened by the management board to adopt resolutions required under Article 72 of the Act and in other cases specified in the articles. The articles may also define circumstances under which beneficiaries may request a meeting and determine which beneficiaries are entitled to participate—not all beneficiaries must be included.
Legislative Progress
On January 26, 2023, the lower chamber of Parliament reviewed the upper chamber’s position on the Act. Some amendments were accepted, and the final version of the legislation was forwarded to the President (RP) for signature.
