Guernsey: The key difference between a foundation and a trustThe main difference between a Foundation and a Trust is that a Foundation is a legal entity and owns its assets in its own right as opposed to a Trust, where the assets are legally owned by the Trustees, who hold them for the benefit of the Beneficiaries under the terms of a Trust Deed. A Foundation creates a separate legal entity with its own legal personality, distinct from the Founder(s), Council or Beneficiaries. A Foundation has a number of characteristics that are similar to those of a company having a separate legal personality and a management board known as a Council. However, importantly, it is entirely independent and has no shares and no members, nor any concept of share capital.
Beneficiaries and a Unique Feature of a Guernsey FoundationA Beneficiary of a Foundation is anyone who is entitled to benefit from that Foundation. Beneficiaries must be identified by name or by their relationship to another person.
- A unique aspect of Guernsey Foundation Law is that it provides for both enfranchised and disenfranchised Beneficiaries.
RegistrationA Foundation comes into being on registration of its statutory documents with the Registrar. In order to register a Foundation the following documents and information need to be provided:
- The Charter
- A declaration signed by the Founder (or his agent)
- The names and addresses of the proposed Councillors and their consents to act
- The name and address of the proposed Guardian (if any), and his consent to act
- The address and telephone number of the registered office of the Foundation in Guernsey
- The registration fee
Key Features of a Guernsey Foundation
- The Council
- The Constitution: Charter and Rules
- The Founder
Reservation of Powers by the FounderThe Founder may reserve certain limited powers to himself, such as the power of amendment or revocation of the Constitution, and/or of the Purposes of the Foundation. Such powers can be reserved only for the duration of the Founder’s life, if he is a natural person, or for 50 years from the date of establishment, in the case of a legal person. After which point the reserved powers will automatically lapse. This does not preclude the Council from delegating certain functions to the Founder.