publication date: November 29, 2022
The Polish Council of Ministers adopted the draft law on family foundations, submitted by the Minister of Development and Technology.
In Poland, nearly 830,000 of enterprises are family businesses that generate annual revenue of PLN 322 billion. Many of them face, or will face in the near future, the need to transfer their assets to legal successors. A large number of companies also intend to carry out succession, which will allow them to manage their assets in a multi-generational perspective.
In order to effectively carry out the succession, entrepreneurs must have successors who will be able and willing to continue running the business, or at least perform ownership functions in it, entrusting management to a professional management board. Therefore, the Polish government has prepared tools that will allow to build organizational structures that ensure the continuation of business and protection of assets – in a perspective longer than one generation – without the need for personal involvement of legal successors in running a business.
It will be possible to establish family foundations. Their task will be to implement the legal objectives set by the founder, based on the property owned, which can be secured against its loss.
The founder will have a considerable freedom in defining the principles of managing the family foundation, its operation and the purpose for which it was established. Most often it will be ensuring the uninterrupted operation of the company.
The task of the family foundation will be to collect and manage assets. This will enable the succession process to be carried out without the need to introduce changes in the organizational structure of the enterprise or capital group.
In order for a family foundation to be established under Polish law, it will be necessary to draw up a founding deed by a notary public. A family foundation can also be established in a will. It will also be necessary to draw up a statute, appoint bodies and enter it in the register of family foundations.
A family foundation may be established only by natural persons with full legal capacity or by several such persons who jointly have the status of a founder. Due to the applicable rules for drawing up wills – a family foundation, established in a will, will be able to have only one founder.
The family foundation will transfer, in accordance with the founder’s will, its profits or part of its assets to beneficiaries – natural persons (as a rule, they will be members of the founder’s family). Non-governmental organizations may also be beneficiaries.
Assets endowed with a family foundation may be property, within the meaning of the Polish Civil Code, belonging to the founder or founders.
These may be, for example, all assets, including cash, securities, movables and real estate transferred to the family foundation, shares and stocks, share rights in partnerships within the meaning of the Commercial Companies Code, as well as in foreign entities.
The founder will have to contribute property to the family foundation, intended for the implementation of its goals, with a value of at least PLN 100,000. PLN – it will be called founding fund.
When will the new regulations come into effect?
The new solutions are to enter into force 3 months after being published in the Polish Journal of Laws.
KIELTYKA GLADKOWSKI advises on all aspects of family foundations registration, tax planning, funds contributions, asset regulation, contracts formation and regulatory matters.