Consultations on the draft Family Foundation Act ended last week. The name of the new institution raises a lot of emotions.
COMMENT by Tomasz Krzywański from the GWW private client advisory team.
The name "family foundation" defines the nature of the newly created entity too narrowly. After all, among beneficiaries of the foundation there will be not only members of one family, but also company officers or public benefit organizations. It is also possible to imagine a situation when the founder sets up a foundation only for himself as the beneficiary. Foreign practice shows that these are not rare cases.
Therefore, he postulates using the name "private foundation", which at the same time better emphasizes the difference from the public purpose foundation. Such a distinction, he claims, into public and private foundations exists, for example, in Belgium, the Netherlands, Austria and Liechtenstein. The expert notes that, however, he is cautious about the idea of the Ministry of Justice to define the new entity as a "fund". - Linguistically, the fund means the common property of participants gathered in one place in order to collectively manage it - he explains.
During yesterday's meeting of the deputy head of the Ministry of Development, Labor and Technology Marek Niedużak with journalists, the issue of postulates about enabling foundations to conduct business activity was also raised. - We propose allowing the running of business activity to the extent that it serves the implementation of statutory objectives. A similar solution is already in place in the Act on Foundations of 1984 - says Mr. Krzywański.
He argues that the prohibition to run business activity in the current shape now may significantly impede operations of smaller family foundations, whose property, instead of shares in commercial companies, will be other assets, e.g. real estate or an enterprise or its organized part (in the case of sole proprietorships).
The comment was published in an article by Sonia Sobczyk-Grygiel in Dzienik Gazeta Prawna
The whole article can be downloaded here.