A family foundation is a tool that allows for effective management of assets and their transfer to future generations. It allows for the protection of assets against fragmentation and for succession planning in a tax- and legal-friendly manner. However, establishing a family foundation in Poland requires going through several key stages, which we discuss in detail below.
Contents
1. Decision to establish a family foundation
The first step is to decide to establish a foundation and define its purpose. A family foundation should serve to manage assets and pay benefits to beneficiaries, who are usually members of the founder's family.
2. Contribution of initial assets
The founder must decide what assets will be contributed to the foundation. The minimum value of assets is PLN 100,000. These may be financial resources, real estate, shares in companies, stocks or other valuable assets. Contributing these components means that they cease to be the property of the founder, becoming the property of the foundation, which of course does not mean losing possession of them.
3. Preparation of the articles of association
A family foundation is established by a founding act, which must be prepared in the form of a notarial deed. This document should include:
- Name of the foundation – must be unique and compliant with legal regulations,
- The headquarters of the foundation – indication of the city where the foundation will be registered,
- The purpose of the foundation – should concern the protection and management of assets,
- Initial assets – precise definition of its value and components,
- Rules of representation – indication of the persons responsible for managing the foundation.
4. Establishing the foundation's statute
The statute is a key document regulating the functioning of the foundation. It should include:
- Benefit payment rules – who and on what terms will be the beneficiary,
- Method of managing assets – rules regarding investments, withdrawals or reinvestments,
- Foundation bodies – e.g. management board, supervisory board or meeting of beneficiaries,
- Detailed regulations regarding the liquidation of foundations – in the event of its termination.
5. Registration of the foundation in the National Court Register
In order for a family foundation to operate, it must be registered in the National Court Register (KRS). The application should include:
- articles of association,
- foundation statute,
- list of members of the management bodies,
- declaration of contribution of initial assets.
After positive registration, the foundation obtains legal personality, which allows it to formally begin its activities.
6. Foundation management
After registration, a family foundation operates in accordance with the principles set out in the statute. It can conduct limited business activities, such as managing real estate, investing capital or deriving income from shares in companies. Payments of benefits to beneficiaries must be in accordance with the statutory provisions and decisions of the foundation's governing bodies.
Summary
Establishing a family foundation is a process that requires thought, detailed planning and support from professionals such as lawyers and financial advisors. A well-thought-out legal structure and a well-designed statute allow for long-term asset protection and its smooth transfer to subsequent generations in a tax- and legal-friendly manner.
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