A foundation’s entry in the commercial register
A foundation’s entry in the commercial register is a mandatory requirement for its establishment. The classic foundation receives full legal capacity and capacity to act with this entry. The application must be submitted by the future governing bodies.
The commercial register contains legally significant facts about legal persons such as the stock company, the limited liability company or the sole proprietorship. Notably, the entry in the commercial register gives information about the stock of a legal entity, their name, their home, their capital and especially about the authorised representatives. The registry of commerce checks the details of the legal entity before they are registered, which significantly increases the legal certainty in commercial transactions.
The entries in the commercial register are public and can be viewed by anyone (e.g. at Zefix). The commercial register has various effects, of which the two most important are the positive and the negative publicity effects (see blog post in german).
Constitutive effect of the entry
The classic foundation is established by means of a public certificate, known as the foundation deed. In a legal sense however, the foundation is first considered established when it has been entered in the commercial register. The entry in the commercial register is therefore constitutive (see blog post in german). The foundation first receives full legal capacity and capacity to act with this entry.
Put simply, the foundation exists once it has been entered in the commercial register. On the other hand, it does not exist if there is no entry. Prior to entry, the governing bodies (e.g. the foundation council) cannot act for the foundation, it is possible however for the foundation to be referred to as a recipient of funds before entry.
The same regulation also applies to the establishment by a last will of the benefactor.
Ecclesiastical foundations and family foundations
Ecclesiastical foundations and family foundations do not need to be entered in the commercial register to be established. These special cases are established when the foundation deed is publicly attested.
An obligation to register only exists if the foundations operate a commercial enterprise.
Who has to submit an application?
The entry in the commercial register must be principally submitted by the governing bodies of the foundation. As a rule, these are the members of the foundation council, such as the President and Vice President. It is advisable to send a draft of the foundation deed to the commercial register for preliminary review.
