1 guide on the topic “Foundation”: legal obligations, concrete procedures, costs and deadlines.
A foundation dedicates assets to a disinterested purpose, with no members and no profit sharing. Families, philanthropists and entrepreneurs use it to support a cause over the long term. This page helps founders choose the right model and avoid the usual traps.
Book 11 of the Code of Companies and Associations governs this form. One or more founders transfer assets to the entity. A board then manages them, according to the articles. No founder or director may draw any financial benefit from it.
The difference with a non-profit association lies in its structure. An association brings people together around a project. A foundation, by contrast, starts from assets dedicated to a cause. Our guide to setting up a non-profit helps you compare both options.
The private model remains the most accessible. A single founder is enough, whether a natural or legal person. The law sets no minimum amount of assets. The entity comes into being by notarial deed or by will, and gains legal personality upon filing of the deed.
The public-benefit model pursues a purpose of general interest, for example philanthropic, scientific, artistic or cultural. Recognition requires a royal decree, following an application to the FPS Justice. That status brings official recognition, but also stricter requirements.
Creation follows a simple order.
The entity then receives its enterprise number. It must also register its beneficial owners in the UBO register. Above all, take care over the rules for amending the articles. Without a members' meeting, nobody can easily adapt overly rigid wording. Also plan the succession of directors, since the entity often outlives its founders.
In principle, the entity falls under legal entities tax. However, it switches to corporate income tax if it mainly carries out profit-making operations. Like a non-profit, it also keeps accounts suited to its size. Donors may obtain a 45% tax reduction. This requires a gift of at least 40 euros a year to an approved institution.
Promising that benefit without approval therefore counts as a serious mistake. The conditions appear on the FPS Finance website.
Take a fictitious example. A founder contributes 10,000 euros to fund study grants every year. That capital risks running out fast. It makes more sense to narrow the purpose or plan regular contributions.
Our complete guide to creating a foundation details each model. For governance, also read director liability and publication in the Official Gazette.
