On 21 February 2023, the Family Foundation Act of 26 January 2023 was published in the Journal of Laws. The new regulations govern the formation and operation of family foundations and define the rights and obligations of the founder and beneficiaries of the foundation.
The Act of 26 January 2023, signed by the President and announced in the Journal of Laws, aims to introduce into the Polish legal system the concept of a family foundation as an entity used to accumulate family property and allow it to be kept in the country. Similar solutions have been successfully operating in many EU countries for years.
A family foundation’s’ goal is to protect the family business for many generations, meet the needs of its beneficiaries and conduct business activity only to a strictly defined extent. It will have a legal personality after entering in the register of family foundations kept by the Regional Court in Piotrków Trybunalski, and its activities will be regulated by the foundation deed established in the form of a notarial deed under pain of nullity.
A family foundation may be established by more than one person, including unrelated persons, however, if a foundation is established in a will, only one person will be able to become a founder. Only a natural person with full legal capacity who transfers certain assets to the foundation will be able to act as the founder of a family foundation.
A family foundation can be established in the form of a founding deed or in a will executed before a notary.
In addition, the founder will have to contribute the founding capital. The value of the initial capital may not be lower than PLN 100,000. The founding capital will have to be contributed in full before the foundation is registered in the register of family foundations, except for foundations established in a will, for which it will be contributed no later than 2 years after their registration.
Learn more: Family Foundation – a new concept in Polish law
The governing body of a family foundation will be a one- or multi-person management board. The act defines a three-year term of office for a member of the management board, but the foundation deed may provide otherwise.
The optional body of a family foundation is the supervisory board, and the obligation to appoint it will arise if the number of the foundation’s beneficiaries exceeds 25 persons. According to the provisions of the act, the term of office of a supervisory board member will last 5 years.
The third body of the family foundation will be the assembly of beneficiaries, in which beneficiaries with the right to participate in it granted in the foundation deed will be able to participate. The tasks of the assembly will include adopting resolutions on specific matters specified in the act or foundation deed, such as approving the foundation’s financial statements.
Resolutions of the above-mentioned bodies of the foundation will require an absolute majority of votes (unless the foundation deed provides otherwise), and each member will be entitled to one vote. As a rule, votes will be open, except for votes that concern personal matters, when it will be possible to hold the vote secret.
The act introducing the concept of a family foundation into the Polish legal system will enter into force 3 months from the date of its publication in the Journal of Laws, i.e. it will come into force on 22 May 2023.
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