A7 Administrative control of the Liechtenstein private-benefit foundation
As a further body in addition to the Board of Trustees, the Foundation may have an auditing body. The auditors check annually whether the foundation’s assets have been managed and used in accordance with their intended purpose. In principle, the establishment of an audit office is voluntary. A legal obligation exists only for foundations which are subject to the supervision of the foundation supervisory authority. The auditors are appointed by the Liechtenstein District Court; the founder has a right of nomination.
The auditors may not themselves sanction objections or identified deficiencies, but must apply to the District Court of Vaduz for the necessary orders through the ordinary legal channels (non-contentious proceedings).
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Control body | Supervisory Board
If the foundation is not subject to foundation supervision, the founder may also set up a private supervisory body (supervisory board) in addition to an auditing body.
The tasks correspond to those of an auditing body. This private controlling body must also be independent of the foundation and may not belong to any other foundation body, have no employment relationship with the foundation and no family ties to foundation bodies or beneficiaries of the foundation. In practice, the founder appoints named confidants for the control body with appropriate expertise to perform the control tasks. If the founder is not a beneficiary of the foundation, he can also assume the control function as a supervisory board himself. As in the case of the auditors, complaints or misconduct can only be sanctioned by the ordinary courts.
Protector | Advisory Board | Collator | Trustee
The founder may also provide for or establish further bodies in the foundation deed such as protector, advisory board, collator and trustee with the following areas of responsibility:
The determination of a beneficiary from the group of beneficiaries, the determination of the time, amount and condition of a distribution, the administration of the assets, the advice and support of the foundation board, the supervision of the foundation administration, the safeguarding of the foundation’s purpose, the reservation of consent or the issuing of instructions as well as the safeguarding of the interests of foundation participants.
The other bodies may not only assume supporting and controlling functions, but may also have decision-making powers, approval or veto rights.
These bodies do not have any power of representation.
Advisory board in DE, CH, AT
DE: Under German law, the establishment of an advisory board is optional.
CH: In Switzerland, the advisory board functions are assumed by the auditors. Auditing obligation with exception reservation. Family foundations, among others, are exempt.
AT: In Austrian private foundations, the supervisory board is generally optional. The mandatory second body is a foundation auditor to be appointed by the court.