In May 2023, the provisions of the Family Foundation Act of January 26, 2023 will enter into force. It is worth familiarizing yourself now with the registration procedure and beginning preparations to establish a family foundation.
Who Can Establish a Family Foundation?
According to the Act, the founder of a family foundation is a person (or persons) with full legal capacity who submits a declaration of establishment either in a founding deed or in a will.
Steps to Establish a Family Foundation
To establish a foundation, the following steps must be taken:
1. Declaration of Establishment The law provides two options: the founder may declare the establishment of a family foundation either in a founding deed or in a will. Both documents must be executed in the form of a notarial deed. If the declaration is made in a will, only one person may act as founder.
Upon execution of the founding deed or announcement of the will, the foundation enters the status of “in organization.” It remains in this form until officially registered. During this time, its name must include the designation “in organization.” A foundation in organization does not yet have legal personality and is represented by the founder, a proxy appointed by the founder, or — in cases specified by the Act — by the management board.
2. Drafting the Articles The articles of the family foundation are prepared by the founder in the form of a notarial deed. This is one of the most critical documents, regulating the foundation’s operations and its internal bodies. Article 26 of the Act specifies the required contents:
The articles must include:
- The name of the foundation
- The registered office
- The foundation’s purpose
- The beneficiary or method of designation, and the scope of their entitlements
- Rules for maintaining the list of beneficiaries
- Procedures for renouncing beneficiary rights
- Duration of the foundation, if specified
- Value of the founding fund
- Rules for appointing and dismissing members of the foundation’s bodies, their powers and duties, and representation rules
- Entity authorized to approve actions of the management board during the “in organization” phase
- At least one beneficiary entitled to participate in the beneficiaries’ assembly
- Rules for amending the articles
- Allocation of assets upon dissolution, including designation of the beneficiary entitled to receive assets
The articles may also include:
- Rules for cooperation between foundation bodies
- Specific circumstances for dissolution
- Investment guidelines
- Provisions for establishing local branches
Confidential information may be included in separate documents, provided they are referenced in the articles.
3. Asset Inventory The inventory must list all property rights contributed to the foundation by the founder or other persons, specifying the contributor, type, and value of each item. Values must reflect the condition and market price at the time of contribution, as well as their tax value. The inventory must be in writing, and its accuracy is the responsibility of the management board.
4. Establishment of Required Bodies The Act provides for three core bodies: the management board, supervisory board, and beneficiaries’ assembly. The supervisory board becomes mandatory only when the number of beneficiaries exceeds 25. Due to the nature of their roles, no individual may serve on more than one body simultaneously.
5. Contribution of the Founding Fund The founding fund consists of assets contributed by the founder, with a minimum value of PLN 100,000 as specified in the articles. If the foundation is established via founding deed, the fund must be contributed before registration. For foundations established by will, the fund must be contributed within two years of registration.
6. Registration in the Family Foundation Register This is the final step. Upon registration, the foundation acquires legal personality. The register is maintained by the District Court in Piotrków Trybunalski.
Legal Support
Establishing a family foundation is a complex legal process. Destrier Law Firm offers comprehensive support, including drafting the articles and guiding clients through each stage of the founding procedure.
