A Foundation will be created when one or more persons or legal
entities (Founders) formalize a Charter, which is registered with
the Registrar at the Jersey Financial Services Commission, through
which the founders undertake to make donations (Foundation Assets)
for the benefit of Beneficiaries. The foundation assets will be
managed by a Council consisting of individuals or a body corporate,
but which must include a Qualified person which is a person
registered under the Financial services (Jersey) Law 1998 to carry
out trust company business that includes the types of business
mentioned in Article 2(4) of that law.
Key facts of the new Law are as follows.
Must be incorporated by a "Qualified Person" on
behalf of the founder, and an application for incorporation must be
accompanied by the foundation charter.
At incorporation, the Qualified Person must certify that a
specific Qualified Person will become a member of the foundation
The name of the foundation must end with the word
"Foundation" or its equivalent in a foreign
Entry in the Register is conclusive evidence that on the date
set out the foundation was incorporated and the requirements of the
Foundations Law were met.
A foundation cannot engage in commercial trading other than
trading, which is incidental to the attainment of its objects.
The Charter must be lodged with the Registrar on incorporation,
and must specify:
The name of the foundation
The objectives for which the foundation was established (which
can be charitable or non-charitable or both and can be for the
benefit of people or purposes or both)
The names and addresses of the first members of the
The details of any initial endowment
What will happen to foundation assets should the foundation be
wound up and dissolved
If it is to be wound up and dissolved upon the happening of an
event or the expiration of a fixed period of time, details of the
event or time
What is a Foundation?
A Foundation is a combination of a trust and a corporation. It
has a separate legal personality, is able to hold its own assets,
contract with third parties and sue and be sued in its own name and
capacity, but does not have shareholders and holds assets for the
benefit of beneficiaries.
Purposes of a Foundation
Foundations, elsewhere, do not replace companies, but compliment
them and are primarily used for charitable purposes, to serve as
the owners of companies (in which capacity the Foundation is
generally called a "holding company" or a parent company)
and for family and or inheritance purposes.
The purposes for which Foundations have been used are one or a
combination of the following:
To protect persons at a disadvantage because of minority or
incapacity who cannot manage their assets or risk losing them
To protect against fragmentation and outsiders gaining control
of family businesses which are passed down generations
To guarantee payment of sums of money or assets to members of
one or more families for their requirements
To carry out scientific, humanitarian, philanthropic, religious
or charitable activities or to manage funds for the same
To manage employee benefits such as pensions and options
As a substitute for a will thereby circumventing complicated
As a substitute to a pre-nuptial agreement
To own and or invest in shares, interest and stocks of private
companies or other securities
To collect royalties and other types of returns
To own real estate or other moveable property
To insure assets against different adverse situations, such as
excessive taxes for those that reside where assets are located,
future claims by creditors, forced heirship or political or
economic instability in the country where the client resides
To manage bank accounts
For any specific asset protection
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).