FAMILY FOUNDATION
A family foundation makes it possible to organise the way in which family assets are managed and to set out the rules for their use over the longer term. Its structure may include, among other things, shares in companies, real estate, cash and other assets, and the founder may determine the rules for the provision of benefits to beneficiaries.
The decision to establish a family foundation should be based on clearly defined objectives relating to the assets and their future. We analyse the business structure, the assets, the ownership situation and the founder's expectations in order to assess whether a family foundation is the optimal solution and how it should be designed to meet specific needs.
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A family foundation is a legal person established for the purpose of accumulating assets, managing them in the interest of the beneficiaries and providing benefits to them. The detailed purpose of the foundation and the rules of its operation are set out by the founder in the articles of association.
In practice, a foundation makes it possible to concentrate specific assets in a single structure and to set out the rules for their management and use by the family in the years to come.
It is not a solution solely for entrepreneurs preparing for a generational change. It may also be used to organise dispersed assets, to separate ownership from day-to-day management, or to set out the rules for the use of assets by family members who are not involved in running the business.
You have a company or substantial assets and want to assess whether a family foundation will be the right solution. We analyse the ownership structure, the type of assets held and the objectives the foundation is to pursue.
Shares in companies, real estate, investments or other assets currently belong to various persons or are held within several structures. We assess which components are worth including in the foundation and what the consequences of such a solution will be.
The founder wants to determine who will use the foundation's assets and on what terms. We help to translate these assumptions into legal solutions and appropriate provisions of the articles of association.
A family foundation makes it possible to separate participation in the benefits flowing from family assets from direct involvement in running the business, allowing the management of the business and the use of assets by family members to be regulated separately.
The founder's assumptions require the rules concerning beneficiaries, benefits, the foundation's bodies, control and decision-making to be regulated.
We assess the tax consequences of the planned structure, the contribution of assets to the foundation, the activity it conducts and the payments and benefits provided to beneficiaries.
We support existing foundations with amendments to their articles of association, benefit rules and asset structure, with transactions and with ongoing legal and tax matters.
The mere ownership of a company or substantial assets does not determine whether establishing a family foundation is justified.
Before making a decision, we analyse, among other things:
A family foundation should not be an end in itself. It should correspond to a specific ownership, asset-related and family objective.
If another solution better suits the owner's situation and objectives, we propose alternative options for structuring assets and ownership, tailored to your individual needs.
We assess the owner's situation, the structure of the business and assets, and the objectives the foundation is to pursue.
We determine the role of the founder, the circle of beneficiaries, the rules of operation of the bodies and the manner of taking the most important decisions.
We prepare solutions concerning the operation of the foundation, the beneficiaries, benefits, the competences of the bodies and mechanisms enabling the structure to be adapted to future changes.
We analyse which assets should be placed in the foundation and how their contribution will affect the current ownership, legal and tax structure.
We analyse the tax consequences connected with the establishment and operation of the family foundation, the scope of the activity it conducts and the benefits provided to beneficiaries.
We prepare the documentation needed to establish the foundation and support the process of its entry in the register of family foundations.
If the current business structure requires changes before the assets are contributed, we analyse and coordinate the relevant legal, corporate and tax measures.
We support operating foundations with organisational changes, transactions, settlements and new decisions concerning assets and beneficiaries.
The process should begin with determining the function the foundation is to perform and which assets are to be placed in its structure.
We determine the structure of assets and business, the ownership situation and the founder's objectives.
We determine the beneficiaries, the rules for benefits, the structure of the bodies, the control mechanisms and the manner of taking decisions.
We translate the ownership and family assumptions into the documents governing the operation of the foundation.
We coordinate the steps connected with the formal establishment of the family foundation.
We support the preparation and conduct of the process of entry in the register of family foundations.
We coordinate the legal and tax aspects of transferring the assets and the implementation of the adopted operating rules.
The articles of association set out the most important principles of the foundation's operation and should reflect the founder's actual assumptions.
When preparing them, we analyse, among other things:
A ready-made template does not take into account the specific nature of a particular business, assets and family relationships. The articles of association should follow from a previously established model of the foundation's operation, not the other way round.
The decision to establish a foundation should include an analysis of the assets to be placed within its structure.
Depending on the situation, these may include, among other things:
Transferring all assets to a family foundation is not always justified. We analyse the function of individual assets, their connection with operating activity, the manner in which they generate revenue, and the legal and tax consequences of their contribution.
The aim is to create a structure covering the assets that are actually to be managed over the longer term.
The founder determines the persons who are to benefit from the foundation's assets and the rules for providing benefits to them.
When designing the solution, we analyse, among other things:
Well-designed rules for benefits make it possible to reduce the risk of future misunderstandings and to clearly define how the foundation's assets are to be used.
Tax aspects should be taken into account both at the stage of designing the family foundation and in the course of its continued operation.
The analysis should cover:
The tax consequences depend on the type of activity, the asset structure and the status of the entities participating in it. They should therefore be assessed on the basis of the specific model of the foundation's operation.
A family foundation is primarily to pursue specific asset and ownership objectives, and tax issues should form one of the elements of a comprehensive assessment of the planned structure.
When developing solutions, we take into account the current legal provisions and planned and introduced legislative changes that may affect the foundation's operation and the achievement of the intended objectives.
Before entry in the register, the foundation operates as a family foundation in organisation. Already at this stage it is worth planning the activities to be carried out before registration and immediately afterwards.
A family foundation acquires legal personality upon entry in the register of family foundations.
After registration, we support the foundation, among other things, with:
We also analyse whether the planned activity corresponds to the principles of a family foundation's operation and what legal and tax consequences may result from the adopted manner of operation.
A family foundation may be one of the elements of organising the ownership of a family business, but it does not replace the entire succession process.
Succession planning also covers the future management of the company, the roles of successors, ownership responsibility and preparing the next generation to take over specific functions.
If the main problem is determining who is to take over the company and how, the starting point should be a broader succession analysis.
We analyse the structure of assets and the business, as well as the objectives connected with establishing or operating the foundation.
We present the recommended model and identify the legal, tax and organisational issues requiring resolution.
We prepare the documentation, coordinate formalities and support the process of transferring assets.
We advise on subsequent decisions concerning the foundation's operation, assets and beneficiaries.
A family foundation combines ownership, legal, tax and financial issues. Depending on the project, we involve experts responsible for the individual areas.
We do not start by preparing the articles of association. First we assess the owner's objectives and check whether a foundation actually suits their situation.
We assist in designing the structure, preparing documents, registration and implementing the adopted model.
We also support clients after registration, when the asset structure, the beneficiaries' situation or the legal and tax environment changes.
Attorney-at-law | Director, Legal Department Russell Bedford Poland
Izabela Podleśna is an attorney-at-law and a Director at Russell Bedford Dmowski i Wspólnicy Kancelaria Adwokacka S.K.A. She has over 13 years of experience in legal advisory, in particular in corporate services, reorganisations and M&A transactions. She advises Polish and international entrepreneurs, capital groups and other ownership structures.
specialises in corporate reorganisations, transactions involving the acquisition and disposal of assets and shares, ongoing corporate services and due diligence. It also has experience in acquisition processes conducted by alternative investment companies (VC) in the start-up sector and in the field of business succession and family wealth protection.
Specialisations
Depending on the scope of the project, the legal team also cooperates with Russell Bedford tax advisers and financial experts.
A family foundation is a legal person serving to accumulate and manage assets in the interest of the beneficiaries and to provide benefits in accordance with the rules laid down by the founder.
Planning the transfer of ownership, management and responsibility to the next generation.
Changing the legal and ownership structure of the enterprise before or after the establishment of the foundation.
Analysis of the tax consequences of planned ownership and organisational changes.
Ongoing advice for companies, owners and capital groups.
View serviceWe can start with an analysis of the current business structure, assets and the owner's objectives.
On this basis, we will assess whether a family foundation is the right solution, which assets should be included in its structure and how to design the operating rules to meet the needs of the founder and the beneficiaries.
The information presented on this page is of a general nature and does not constitute legal or tax advice. An assessment of a specific situation requires an analysis of its individual circumstances.
