What should you know about foundations?
The activity of the foundation in trade and the newly designed family foundation.
Foundations are quite a specific legal creation, in accordance with the law, a foundation may be established to implement socially or economically useful goals consistent with the basic interests of the Republic of Poland, in particular such as: health protection, economic development and science, education and upbringing, culture and art , welfare and social assistance, environmental protection and protection of monuments. The Foundation operates on the basis of the provisions of the Act of April 6, 1984 on foundations and on the basis of its own statute.
Establishing a foundation
Foundations may be established by natural persons, irrespective of their citizenship and place of residence, or by legal persons domiciled in Poland or abroad, and the seat of the foundation should be in the territory of the Republic of Poland.
In order to formally establish a foundation, it must be established by means of a declaration of will on the establishment of the foundation. The act requires the form of a notarial deed.
This form is not required if the foundation is established in a will, which is also often the case. The declaration, in addition to the indicated legal form, must contain the purpose of the foundation and assets intended for the implementation of the purpose. The foundation's operation is also based on its statute. The provisions of law indicate the obligatory elements of the statute, they include:
the form and scope of the foundation's activity,
composition and organization of the management board and the method of appointment,
the duties and powers of this board and its members.
In addition to the obligatory elements, there are also optional elements, as the statute may also contain other provisions, in particular regarding the conduct of business activity by the foundation, the admissibility and conditions of its merger with another foundation, changes to the purpose or statute, and also provide for the creation of other foundation bodies in addition to the management board.
The Foundation is subject to entry in the National Court Register, upon entry into the register it obtains legal personality, which means that it is the subject of rights and obligations, may sue and be sued.
Foundation and running a business
The Foundation can run a business like commercial companies. Of course, this type of activity does not only serve the purpose of acquiring material resources, but is complementary to the statutory activity of the organization and its internal source of securing funds for program and current activities. If the foundation is to run a business, the value of the foundation's assets intended for business activity may not be less than PLN 1,000.
The foundation's business activity in the dimensions that serve to achieve its goals is understood as a situation in which the foundation's economic activity may not exhaust all of its activities, and is only to be auxiliary to its statutory activities. As a consequence, the effects of economic activity are only meant to supplement the funds allocated to statutory activity, and it is unacceptable to give economic activity the importance of basic activity.
It should be indicated that if the foundation is active, it must be reflected in the foundation's status. The foundation of economic activity not provided for in the statute requires a prior amendment to the statute.
Due to the fact that the foundation can run a business, it is a normal legal entity that can play various roles in the course of trade. He may also be a party to court trials and various proceedings. Property disputes to which the foundation is a party are heard by the court.
Special bonuses for the foundation
The act and the foundations provide that the Council of Ministers may, by regulation, define reliefs and exemptions for allocating profits from the foundation's economic activity for the implementation of its statutory tasks, other than reliefs and exemptions specified in other acts.
Family foundation - the essence
The family foundation is a project phase, there are currently no regulations, but the main assumptions of this institution are known, which is mainly aimed at protecting Polish family businesses and facilitating their succession.
This means that the new form of foundation cannot be associated with the normal foundation described above. If only because the projected goals of each of them are different. The foundation is intended to ensure the durability and indivisibility of the company's assets. The founder, i.e. the owner of the family business, will be able to bring it to the foundation.
The inability to run a business is supposed to be a significant difference.
Experts indicate that such a solution that prevents the family foundation from running a business is a good solution. One of the fundamental ideas related to a family foundation is to isolate family assets in both actual and legal ways from legal and tax risks. What it will look like in the end will be revealed only after the entire legislative path has been passed.
Polish designers of the new institution emphasize that the decision to establish a family foundation is most often justified by the desire to avoid fragmentation of the property accumulated in the family and to protect investments.
It should be borne in mind that a family foundation is not a novelty, as similar entities have been functioning for years in European legislation, although there is no one universal model of a family foundation.
The one in Poland, at least in principle, is to be a legal person, and its seat would have to be on the territory of the Republic of Poland. A family foundation could be established for a definite or indefinite period of time. In order to establish a family foundation, it would be necessary for a notary to draw up a founding deed or a will, including a declaration on the establishment of a family foundation. The requirement to maintain the form of a notarial deed would ensure the safety of trading, in particular that the effects of establishing a family foundation may significantly affect the rights of the heirs of the deceased founder.
The basic document of the foundation would be the statute, established by the founder and drawn up in the form of a notarial deed. The statute would define the essential matters related to the family foundation. A family foundation could be entered in the register of associations, other social and professional organizations, foundations, family foundations and independent public health care institutions of the National Court Register and would acquire legal personality upon entry. As for the assets of a family foundation, the Founder should be obliged to contribute the founding fund to the family foundation. It remains to be considered whether a certain minimum, legally required level of fund should be envisaged.
The above information on the foundation constitutes certain assumptions which may change as a result of the aforementioned legislative process.
Basis and sources of law:
Act of April 6, 1984 on foundations, Journal of Laws 2020.2167, i.e.
Family Foundation, Green Book, Ministry of Entrepreneurship and Technology, Warsaw 2019.
A. Matłacz, Family Foundation - a new idea of the ministry for company succession, praw.pl, 2020.
Material prepared by the team of "Tak Prawnik".
The owner of the brand "Tak Prawnik" is BZ Group Sp. z o.o.