A6 Foundation administration of the private-benefit Liechtenstein Foundation
The founder appoints the foundation administration and independent control bodies. The foundation board manages the day-to-day business and represents the foundation in external relations.
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Founder’s rights
The founder may appoint a foundation administration suitable to his will, and independent control bodies to ensure compliance with the founder’s will.
The founder may at the same time be a member of the board of trustees or another governing body and / or a beneficiary of the foundation – even the sole beneficiary. Upon its establishment, the foundation is in principle irrevocable and becomes a legal entity in its own right, detached from the founder. The founder’s will is thus frozen with the act of establishment. In breaking with this principle, however, the founder has the right to reserve so-called „founder’s rights“ in the foundation deed. These include the right to revoke the foundation and/or to amend the declaration of foundation. These founder’s rights may neither be assigned nor bequeathed and may not be delegated to the foundation council. These reservations only apply to founders as natural persons.
The reservation of the founder’s rights leads to the classification as a transparent foundation and, abroad, to the consequence of the non-recognition of a separate legal personality.
Binding to founder’s will in DE, CH, AT
DE/CH: The founder’s will is the supreme guideline for the interpretation and actions of the foundation bodies.
AT: Partially disputed in the interpretation of the declaration of foundation.
Lifetime rights of influence of the founder in DE, CH, AT
DE: The founder is bound by his will after the foundation has been established.
CH: Possibility of reservation of rights of amendment
AT: Reservation of rights of amendment and revocation possible
Board of Trustees
The Board of Trustees manages the day-to-day business of the Foundation. It is charged with the pursuit of the foundation’s purpose and asset management and represents the foundation in its dealings with third parties.
The right to amend the purpose reserved to the foundation council or another foundation body in the articles of association may only be exercised within the limits of the law. In this respect, the law provides that an amendment of the purpose of the foundation by the foundation council or another foundation organ is only permissible if the purpose has become unattainable, impermissible or unreasonable or if the circumstances have changed in such a way that the purpose has acquired a completely different meaning or effect so that the foundation is alienated from the will of the founder. Furthermore, the amendment must correspond to the presumed will of the founder and the power to amend must be expressly reserved to the foundation council or the other foundation organ in the foundation deed.
An amendment of other contents of the foundation documents, such as in particular the organisation of the foundation, is permissible by the foundation council or another body if and to the extent that the power to amend is expressly reserved in the foundation deed, if there is an objectively justified reason for amending the other contents – while preserving the purpose of the foundation.
The Board of Trustees shall consist of at least two members, natural or legal persons, nationals or foreigners, domiciled in Switzerland or abroad. The founder or beneficiary may also be a member of the foundation board.
It is mandatory that a lawyer or a trustee licensed in Liechtenstein be a member of the foundation board. This person is personally liable for the fulfilment of compliance regulations, adherence to tax obligations and reporting obligations such as those arising from international tax information exchange agreements.
Board of Directors Administrative body in DE, CH, AT
DE: At least one person for judicial and extrajudicial representation. Founder can be sole director. Board of directors is bound to founder’s will. No personnel requirements for the board of directors.
CH: Founder can be sole member of the board of directors. Changes to the foundation’s purpose and articles of association are reserved to the supervisory authority.
AT: Founder can be member of the board. Non-profit foundations have at least two board members. Private foundations have at least three board members. The board may make changes to the foundation’s declaration, but requires court approval. Two board members must reside in the EU or EEA. A beneficiary, his or her spouse or life partner and relatives up to the third degree as well as legal entities are excluded from co- membership in the board of directors.
Representative
A Liechtenstein foundation must appoint a representative domiciled in Liechtenstein. He has no function as a governing body, but may at the same time act as a member of the foundation council. He or she is authorized to receive service of process vis-à-vis Liechtenstein courts and authorities in all matters concerning the foundation.
