Founding fund
A family foundation in order to come into existence whether on the basis of a deed of incorporation or under a will must be endowed with assets, the so-called founding fund.
The value of the assets that make up the founding fund and are contributed to the foundation upon its establishment by the founder cannot be less than PLN 100,000. The value of assets should not fall below this value also during the foundation’s operation. Any deficit should be made up by the founder.
As a rule, a family foundation will not be entitled to return to the founder the property contributed to cover the initial fund in whole or in part.
Property rights contributed to the family foundation, whether by the founder or other persons, should be included in the so-called inventory of property, which is drawn up in writing. Such an inventory should specify the person contributing the property and the type and value of each property contributed, in the amount determined according to the condition and prices at the time of their contribution and their tax value.
Valuation of the value of property contributed to a family foundation
According to the Law on Family Foundations, if property other than cash is contributed to the foundation, the value of such property is understood to be the market value of the components of the contributed property, determined as of the date of the contribution of such property, in accordance with the rules set forth in the Law of February 15, 1992.
on corporate income tax.
The value of property contributed to the family foundation in the form of foreign currencies shall be converted into zlotys according to the average exchange rate of foreign currencies announced by the National Bank of Poland on the last business day preceding the day on which the property was contributed.
An important feature of a family foundation
A special feature of the foundation is the separation of the ownership of the family business from the collection of benefits from it – the beneficiaries of the foundation will not be its partners and thus will not be able to dispose of their shareholding rights in the foundation. Thus, a family foundation, through its design, thus allows the family’s assets to be protected from disposal by family members.
Covering losses of a family foundation
According to the draft law on family foundations, in the event that the value of a family foundation’s assets resulting from the approved financial statements for a given fiscal year is less than the value of its liabilities, the profit for that fiscal year shall be used to cover future losses of the family foundation.
Board of directors in a family foundation
The primary body of a family foundation is its board of directors, which performs an executive function. As in commercial companies, the board of directors is also responsible for managing the affairs and representation of the foundation. In practice, this means that all activities of the board of directors are, in principle, the same as those of the foundation itself; the foundation, as it were, “acts with the hands of the board of directors.” Of particular importance against this background is the right of representation, which includes the disposal of rights and incurring obligations.
Supervisory board in a family foundation
The supervisory board of a family foundation is an optional body, unless the circle of beneficiaries is larger than 25 people. In most cases at the establishment of family foundations, the obligation to establish a supervisory board will not arise, but over the years and the expansion of the circle of beneficiaries, it may become necessary to constitute this body. The purpose of the supervisory board’s existence and its primary duty is to supervise the activities of the board on behalf of the foundation’s founder or beneficiaries.
Assembly of beneficiaries in a family foundation
The assembly is composed of the beneficiaries of the family foundation. The role of the assembly of beneficiaries is similar to that of a shareholder’s meeting or general assembly, known from capital companies. The assembly of beneficiaries has the power to approve annual accounts, appoint members of other bodies, unless the statute provides otherwise or this power is reserved for the benefit of the surviving founder, and to pass resolutions on matters specified in the statute, including giving consent for the board of directors to perform actions of a certain type.
