Changing the foundation charter
As a legal form, foundations have an immovable structure. Once the foundation has been established as valid, amendments to the foundation charter and thus the purpose are only possible if strict legal requirements are complied with.
The foundation’s governing bodies (e.g. the council) have the basic authorisation to manage the foundation but not to design it. Once a foundation has been established and is valid, the central founding document, or foundation charter, cannot simply be changed by the governing bodies or third parties, nor can it be personally amended by the founder. This rigidity prevents the donated assets being misused or even abused. The disadvantage is that each amendment to the foundation charter involves a complex administrative process with the authorities.
Over the course of the years, however, it may become necessary for the foundation to undergo a conversion in terms of organisational structure and purpose in order to respond to actual circumstances. There are basically two options for amending a foundation charter:
- In cases provided for in law which are regulated in Art. 85 to 86b ZGB (Swiss Civil Code) and
- if the founder stipulated in the foundation charter at the beginning when said charter must be changed.
Legal amendment to the foundation charter
Art. 85 to 86b ZGB describe the three legally justified reasons for changing the foundation charter. These three changes must only be carried out by the competent supervisory authority and the relevant federal or cantonal authority. This should prevent internal governing bodies independently changing the essence of the foundation without good cause.
There is a difference between organisational changes (Art. 85 ZGB see blog entry) and amendments to the purpose (Art. 86 and 86a ZGB, see blog entry). The third statutory regulation concerns the admissibility of minor changes to the foundation charter, which are carried out in a simplified procedure, but still need the approval of the competent supervisory authority. Minor amendments include changing the name or location of the foundation, for example.
Request from foundation council
The foundation council must submit a request to the competent supervisory authority if it is of the opinion that amending the organisational provisions in the foundation charter is necessary. The supervisory authority must then in turn submit a request to the competent federal or cantonal authority and receive approval in order for the amendment to be implemented. Amending the foundation charter results in an alteration to the commercial register (Art. 97 Para. 1 HRegV (Commercial Register Ordinance)).
Amendment to foundation charter
It is permissible, under compliance with strict regulations, for the founder named in the charter to oblige the governing bodies within the foundation to change the foundation charter under clearly defined conditions. The date of the change must be clearly specified in the foundation charter to ensure that the change is not simply the will of the governing bodies.
» More about Foundation» Found a Foundation/Stiftung
