Draft Amendment to the Act on Foundations

The amendment focuses on the introduction of a new legal instrument for the management of assets to support private purposes in the Slovak legal order. This new instrument should largely solve problems with inheritance proceedings and the lack of agreement among owners of a joint stake in a company.

Introduction of a Private Foundation

Specifically, it proposes the introduction of a private foundation, which would allow the management of the testator’s assets and gradually fulfill them to entitled persons.

A private foundation could also serve private purposes that are in accordance with good manners. The founder would be required to contribute to a foundation at least 1 EUR and the property would form a foundation fund and other foundation assets. A private foundation could only be established by individuals through a foundation deed, which would have to be in the form of a notarial record. The rights of the founder of a private foundation could not be transferred to another person and do not pass to a legal successor.

After the establishment of a private foundation, the founder and third parties would be entitled to deposit property into such private foundation. Fulfillments from the property of a private foundation would be paid to entitled persons according to the foundation deed or bylaws, and fulfillments would have to be used for the agreed purpose or would have to be returned.

A private foundation could dispose of and appreciate the property of such private foundation in accordance with the private purpose, but it is not possible to burden it or use it to secure the obligations of third parties.

Bodies of a private foundation

The amendment to the Slovak Act on Foundations and the Slovak Civil Code would introduce bodies of a private foundation, such as (a) a board of directors, (b) a manager, (c) a supervisory board or (d) an auditor, or (e) another body according to a foundation deed.