A private foundation is a foundation which has a private disinterested purpose.
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A private foundation can be set up by one or more persons. Both natural and legal persons can incorporate a private foundation.
If you set up a private foundation, you will have to contribute something. There is, however, no legal minimum capital required for the private foundation, so that the contributions can be reasonably limited. A contribution in cash or kind can be made. For a contribution in kind, no statutory auditor, certified auditor or external auditor must intervene to assess the contribution in kind.
Articles of association
In the articles of association of your private foundation you must include a number of legally compulsory mentions. Set forth below is a brief description of the same.
a) Identity of the founders
In order to allow third parties to know who has incorporated the private foundation, you must include with regard to the identity of the founders a number of data in the articles of association.
If the founders are natural persons, you must include the last name, first name and domicile of each founder in the articles of association.
If the founders are legal persons, you must include the name, legal form, company number and address of the office in the articles of association.
b) Region where the office of the private foundation is established
It is only required by law to include in the articles of association the Region where the registered office of the private foundation is established. It is not required to include the address of the private foundation in the articles of association, in which case the address would be published by excerpt in the Annexes to the Belgian Official Gazette. In this manner, it can be easily changed, if needed, afterwards.
c) Disinterested/charitable purpose and objects
In the articles of association, you shall must also include the disinterested/charitable purpose of the private foundation and what the objects of the private foundation are.
d) Directors and their powers
In the articles of association, you must also stipulate the methods for appointing directors, as well as the term of their mandate. In the articles of association, you must also stipulate how the private foundation shall be represented. It is also possible to include an executive board in the articles of association.
e) Conditions for an amendment to the articles of association
In the articles of association of a private foundation, you must also stipulate under which conditions you can amend the articles of association of the private foundation.
f) Allocation of the capital in case of dissolution
If you dissolve a private foundation, its capital must be allocated to a disinterested/charitable purpose. This is the reason why you have to enter in the articles of association, starting from the incorporation, the disinterested/charitable purpose to the capital of the international not-for-profit association would be allocated in the event that it is dissolved later.
The deed of incorporation and other documents of the private foundation are drawn up in one of the official languages of the language region where the legal person has its office. Non-compliance with this obligation leads to the nullity of the deeds.
For a private foundation which is incorporated in the bilingual region of Brussels-Capital (the 19 municipalities of Brussels), the deeds and documents maybe drawn up, either in Flemish, or in French, or in bilingual form (e.g. in 2 columns).
For a private foundation which is incorporated with an office in the Flemish-speaking region, even in a municipality with language facilities, all deeds and documents must be drawn up compulsorily in Flemish.
For a not-for-profit association which is incorporated with an office in the French-speaking region, all deeds and documents must be drawn up compulsorily in French.
For a not-for-profit association which is incorporated with an office in the German-speaking region, all deeds and documents must be drawn up compulsorily in German.
Identification of persons
When you take part in the incorporation as a founder or are designated as director, you must be identified in the deed.
This identification comprises your last name and first names, your place and date of birth and your domicile. In addition to this, your unique identification number is also included, which is the Belgian national register number, if you have one or otherwise your number in the bis-register of the Crossroads Bank for Social Security. If you do not have that number yet, it’s not a problem: the notary will arrange that for you in the course of the preparation of the incorporation and register you in the bis-register.
The directive also further provides that you must identify yourself with an eIDAS-conformable means of identification of your member state.
Formalities after the incorporation
After having signed the deed of incorporation, you must still complete a number of formalities before the private foundation can conduct its activities.
- The notary will file the deed of incorporation and the excerpt of the deed of incorporation at the registry of the commercial court where the office of the private foundation is located, within thirty days after the signing of the deed. Within ten days after the filing the publication of the excerpt in the Annexes to the Belgian Official Gazette takes place.
- In this manner, the aforementioned legal persons must register with the Crossroads Bank for Enterprises. Through this registration the authorities are informed that your private foundation shall participate in legal transactions as an undertaking.
- The text of the articles of association shall also be filed separately in a database of articles of association which can be publicly consulted
In such database, the provision in the articles of association concerning the power of representation of the directors shall also be included and can be consulted.
All these formalities are performed by the notary after the signing of the deed of incorporation and occur completely electronically. Consequently, you do not have to do anything in such regard yourself.
If the activity which the private foundation shall conduct is subject to VAT, it shall also have to apply for a VAT-number. This application must be issued by the private foundation itself.
Forms of management
A foundation is managed by one or more directors, natural or legal persons. If there are several directors, they constitute a body.
In principle, any person who is legally capable, can be appointed director. There are, in other words, no legal appointment conditions.
A legal person which is appointed director, must always designate a permanent representative. That permanent representative is charged with the performance of the director’s mandate in the name and on behalf of the director-legal person. Outside of the fact that this permanent representative must be a natural person, there are also no special appointment conditions which apply in such regard. It is, however, not possible to be appointed to the management body both in one’s own name and also in the capacity of permanent representative.
The management body may perform all acts which are useful or expedient for the realization of the objects of the association or foundation. The directors can also mutually share their tasks.
The management body is authorized to represent the association or foundation towards third parties. The articles of association can, nevertheless, grant the power to one or more directors to represent the association or foundation alone or jointly.
The management body can assign the day-to-day administration of the foundation or association to one or more persons. The day-to-day administration comprises, on the one hand, decisions which do not go beyond the everyday life needs of the association or foundation. On the other hand, it concerns decisions which do not require the management body’s intervention, because they are of lesser importance or very urgent.
Disqualifications applicable to Directors
In some cases the judge can impose a prohibition on exercising the function of director. Such a prohibition can be imposed on the occasion of a criminal conviction, or within the framework of a judicial dissolution or a bankruptcy. The violation of a director’s disqualification can be sanctioned by a prison sentence and a fine.
Disqualification from a profession deriving from criminal law
The criminal court judge can impose the prohibition, in the event of a fraudulent bankruptcy or misuse of corporate assets, on conducting trade personally or through an intermediary. The duration of this prohibition can also not be less than 3 years or more than 10 years.
If a person has been convicted abroad for such criminal offenses, the Indictment division can still pronounce the disqualification from a profession.
Disqualification from a profession within the framework of a judicial dissolution
The commercial court can impose a disqualification from a profession upon a director who refuses to cooperate with the liquidation of a judicially dissolved company. Upon the closing of the liquidation the prohibition can be imposed, in that case, on exercising the position of director personally or through an intermediary. If the dissolution of the company was pronounced abroad, this power accrues to the commercial court of Brussels. The term of this disqualification from a profession cannot exceed 3 years.
Disqualification from a profession deriving from insolvency law
If a business goes bankrupt and the judge finds that an apparent major error by the bankrupt person has contributed to the bankruptcy, the court can impose a prohibition upon the bankrupt person from running a business personally or through an intermediary. This prohibition can also be imposed upon a director of a bankrupt business whose removal was not made public one year before the declaration of bankruptcy or upon the person who actually managed the business (without having been appointed as director). In addition to this, the prohibition can also be imposed on performing any mandate which entails the power to legally bind a legal person. The court shall establish the term of the prohibition, subject to a maximum of 10 years.
If the bankruptcy was pronounced abroad, the insolvency court of Brussels is authorized to impose such a prohibition.
The court can also impose the prohibition on exercising the function of director upon directors of a bankrupt company who have not given their full cooperation to the bankruptcy trustee. In such case, the duration of the imposed disqualification cannot exceed 3 years.
The existence of a disqualification from a profession is not indicated in the Crossroads Bank for Enterprises or another central register. The relevant information can only be found in the Belgian Official Gazette.
Online incorporation procedure
Today, a private foundation can also be completely set up online and remotely by a notary
- This incorporation is presently, however, not supported yet by this platform through a fully guided process. Therefore, you should contact your notary, for example, by e-mail, to arrange the preparations and to have the draft of the deed of incorporation prepared. The notary will then schedule a videoconference with you and to send you a link to sign the deed electronically during that videoconference.
- Also for this incorporation you must certainly verify whether all incorporators or, if they shall be represented by a power-of-attorney, their representatives, have a recognized eIDAS-conformable means of identification at their disposal.
Do you have an eIDAS-conformable means of identification, but no compatible electronic signature, such as the Belgian eID or itsme, yet ? No problem: this platform provides for an online procedure to create such an electronic signature certificate for you.