Guernsey: The key difference between a foundation and a trust
The 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 Foundation
A 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.
Registration
A 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 Founder
The 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.- Guardian