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What special forms of foundations are permitted?

A typical foundation will have a cultural or ideological purpose. There are also three special forms of legally regulated foundations which must fulfil certain purpose-related requirements in order to be properly established as valid.

sonderformen von stiftungen

The basic form of a typical foundation is constructed around a cultural or ideological purpose (see blog entry on typical foundations). The purpose determines how the donated assets are to be used and stipulates that they cannot use them for unlawful or immoral purposes (see blog entry). In addition to the basic form, there are three statutory special forms, each of which have their own purpose:

  • Family foundations
  • Ecclesiastical foundations
  • Employee benefit schemes (pensions)

The form of the foundation is largely determined by the founder’s choice of purpose for the foundation. But it is the supervisory authorities (see blog entry) who have the last word and decide whether the foundation is a typical foundation or a special form on the basis of objective criteria.

Family foundation

Family foundations primarily serve to support family members who are dependent. The purpose must satisfy strict criteria and may only pay for the costs of raising, endowing or supporting family members (Art, 335 Para. 1 ZGB (Swiss civil code) Other purposes are not permitted and would result in the foundation being void ab initio (Art. 52 Para. 3 ZGB). If a family foundation is void, the assets are returned to the founder. According to the ruling of the Federal Court, there is a ban on foundations which grant funds to family members without preconditions for maintenance or pleasure purposes.

Ecclesiastical foundations

Ecclesiastical foundations are very limited in terms of the purposes that are permitted. They can only serve a religious purpose in connection with certain religious communities/denominations. The ecclesiastical purpose must directly or indirectly serve faith in God. Social or charitable purposes are not ecclesiastical purposes, even if they are carried out by a recognized church. The connection to a community/denomination must be strong to such an extent that the duties of state supervision are taken on by the internal supervisory body of the religious community/denomination itself (Art. 87 Para. 1 ZGB). This particularly concerns the supervision of the proper utilization and correct management of the foundation’s assets.

Employee benefit schemes

Employee benefit schemes are one of the most important manifestations of a foundation. The legal regulations are to be found in Art. 89a ZGB and Art. 331 OR (Swiss code of obligations). There is additional extensive special legislation for second-pillar employee benefit schemes (including BVG (employee benefits act) and FZG (freedom of movement act)). The purpose of employee benefits schemes is to provide pecuniary benefits to employees or their relatives. Due to the BVG, every employer which employs people for whom insurance is mandatory must establish a benefits scheme or join an existing one (Art. 11 Para. 1 BVG). In practice, it is the foundation which asserts its legal form.
» More about Foundation» Found a Foundation/Stiftung

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