The founder's retirement
The entrepreneur steps back from running the business day to day without losing income. The statutes guarantee benefits from the foundation.
Family foundations · Poznań and all of Poland
The family foundation from A to Z.
I design the structure, draft the statute, see the registration through the registry court and support the foundation after it is entered. I registered my first family foundation in September 2023, four months after the Act came into force. The foundations I service today manage assets of over PLN 238 million.
- Since
- September 2023the first family foundation I registered
- Under my care
- Over PLN 238 millionin assets held by the family foundations I service
- Register
- District Court in Piotrków Trybunalskithe single registry court for all of Poland
Why a family foundation
Succession means handing over knowledge, authority and ownership. The foundation takes care of the third.
The business, real estate and shares belong to the foundation, and the founder sets out in the statutes who benefits from the assets, when and on what terms. Any natural person with full legal capacity can establish a foundation, including several people together, regardless of the size of the business or its industry. Foreign nationals can be founders too.
Security for the family
The spouse, children and grandchildren receive benefits on terms set in advance, whoever happens to be running the business.
Business and family kept apart
The foundation's management board decides about the business; the assembly of beneficiaries deals with family matters. Neither blocks the other.
Assets in one pair of hands
Shares do not pass into the estate and are not split among heirs. The foundation's assets are not liable for the beneficiaries' debts.
Growing the assets
The foundation holds shares, lets real estate, buys securities and grants loans. Income from these activities is exempt from corporate income tax until it is distributed.
Continuity across generations
The business has one stable owner, and the succession rules are written down for decades, not for a single generation.
Succession in seven steps
The family foundation is the last step of succession, not the first.
Setting up a foundation makes sense when the assets and the family are ready for it. That is why in succession planning I take the client through seven stages and establish the foundation at the end, once it is clear what and whom it is to serve.
Succession plan
The earlier the better for the business: a timetable, roles and goals for generations.
Asset audit and restructuring
A review of the assets and the company structure before they pass to successors.
Choosing successors
From within the family or outside it, with preparation for their role in the business. Where there are no natural successors: a sale, a buy-out, an equity partner or retaining ownership.
Family mediation
Agreeing the rules before a dispute arises, often in the form of a family constitution.
Inheritance matters
Putting inheritance, forced-share claims and wills in order.
Tax and finance
Debt, financing and the tax consequences of handing over the business.
Establishing the family foundation
Statutes, governing bodies, assets and registration. Six steps below.
How it works
Six steps from the first conversation to a working foundation.
On government websites it is five bullet points: a declaration before a notary, the statutes, the founding fund, the governing bodies, entry in the register. In practice each of them hides decisions that stay with the family for decades.
I run the whole process. The founder takes the decisions; I take care of the rest.
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Designing the structure
I establish who will be the founder, who the beneficiaries, and which assets will go into the foundation. I check the tax consequences, the effect on forced-heirship claims and the relationship with existing companies and marital property regimes.
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Statutes and rules of procedure
I draft a statute tailored to the family rather than a template from the internet: benefits and the conditions for paying them, the composition and powers of the board, the beneficiaries’ assembly and the supervisory board, the rules for amending the statute and dissolving the foundation. The statute requires a notarial deed. Added to this are the rules of procedure of the bodies and the list of beneficiaries.
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The founding deed before a notary
The founder declares the establishment of the foundation in a notarial deed or in a will; a foundation established by will can have only one founder. From that moment a family foundation in organisation exists.
The founding fund of at least PLN 100,000 is contributed before registration, or within two years of registration for a foundation established by will. I prepare the written inventory of the contributed assets.
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Governing bodies and the registration application
The founder appoints the board and, where the Act or the statute requires it, a supervisory board. I collect the criminal-record certificates of the board members and file the application with the register of family foundations at the Regional Court in Piotrków Trybunalski; for a foundation set up by will, all board members sign the application. I respond to the court’s requests so that registration takes place without the application being returned.
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Registration and launch
On registration the foundation acquires legal personality. I arrange the tax and statistical numbers (NIP and REGON), the notification to the Central Register of Beneficial Owners, the bank account and the contribution of the remaining assets: shares, stock, real estate.
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Ongoing support
Meetings and resolutions of the governing bodies, distributions, the asset inventory, amendments to the statutes and the list of beneficiaries, reporting and the mandatory audit. A foundation runs for years, so the work does not end with registration.
What the statutes decide
The statutes are the family's constitution. Written once, they work for generations.
The founder has wide freedom to decide how the foundation works and what it is for. The Act requires the statutes to settle a handful of questions; how they settle them decides whether, twenty years on, the foundation still works the way the founder intended.
- Name, seat and purposes
- Most often: keeping the business running without interruption and providing for the people the founder names. The purposes can also be charitable, cultural or scientific, and the statutes can provide, for example, for education programmes for future successors.
- Beneficiaries
- Who the beneficiaries are, what benefits they receive and on what conditions: age, completing an education, working in the family business, keeping to the rules the founder sets. The founder can change the beneficiaries and their benefits without restriction, including as to time.
- Governing bodies
- The composition, term and powers of the management board and the assembly of beneficiaries; a supervisory board, mandatory with more than 25 beneficiaries and otherwise optional.
- Assets
- The value of the founding fund, the rules for contributing further assets and the limits of what the foundation may do with them within its permitted activities.
- Amending the statutes
- Who may amend the statutes, and how, during the founder's lifetime and after their death; this is where a future family dispute is most often decided in advance.
- Duration and dissolution
- The foundation runs indefinitely or for a period the founder sets. The statutes say when it is dissolved and who receives the assets after liquidation.
The founder and the assets
Who establishes the foundation and what goes into it.
The Act does not close the list of what a foundation may own. It starts with the founding fund and grows through donations and through what the foundation earns itself.
- Founder
- A natural person with full legal capacity. There may be several founders; they exercise their rights jointly unless the statutes provide otherwise. A foundation established by will has only one founder. The status of founder cannot be transferred.
- Founding fund
- At least PLN 100,000: cash, real estate, shares or other property rights, listed in a written inventory of assets.
- Further assets
- Donations from the founder, their statutory heirs, spouse and relatives in the direct line, plus the foundation's own income: dividends from subsidiaries and profits from permitted activities such as dealing in its own property, letting, lending, holding interests in companies, securities or farming.
Taxes in brief
Tax arises only on distribution.
A family foundation is exempt from corporate income tax on its permitted activities: holding shares, letting and leasing, trading in securities, lending to companies and beneficiaries. It pays 15% corporate income tax only when it distributes benefits or hands over assets on dissolution.
Beneficiaries from the founder's closest family pay no personal income tax on benefits, in the proportion corresponding to the assets that founder contributed. More distant relatives and people outside the family pay a flat-rate personal income tax. Contributing assets to the foundation is not taxed.
How this plays out for a particular family depends on who the beneficiaries are, what the assets are and what distributions are planned. I work it out at the first meeting.
Official costs
What the set-up itself costs.
Notarial and court fees are predictable and depend mainly on the value of the founding fund. Below is an example for a fund of PLN 100,000.
- Notarial fee
- The maximum rate for a transaction worth PLN 60,000 to 1,000,000 is PLN 1,010 plus 0.4% of the amount above PLN 60,000, so for a PLN 100,000 fund up to PLN 1,170 net plus 23% VAT and PLN 6 per page for copies. If the notary draws up the founding deed and the statutes as two separate deeds, expect up to about PLN 3,000. I agree this with the notary before signing.
- Court fee
- PLN 500 for filing the foundation with the register of family foundations.
- Criminal record certificates
- PLN 30 for each person who is to sit on the management or supervisory board.
- Stamp duty
- PLN 17 for each power of attorney when the application is filed by a representative.
- Fee
- Agreed after the first conversation, once I know the family structure, the assets and the scope of work.
Contact
Let's talk about your family and your assets.
Meetings at my Poznań office by appointment. I set up foundations for families from all over Poland.
Address Pawłowski Partners, ul. Litewska 3/2, 60-605 Poznań, Poland
Phone +48 61 646 04 60
Mobile +48 602 422 021
E-mail biuro@pawlowski-partners.pl