In projects conducted by PLA.partners, the question of the waiting time for the entry of a family foundation into the register comes up in nearly every conversation with a private client. The answer is significant not only from an organisational perspective, but also in the context of succession planning, ownership transactions and tax policy. PLA.partners helps private clients adjust the action schedule to the real duration of the registration process.
Realistic waiting time for the entry of a family foundation
The current waiting time for the entry of a family foundation into the register is around 12 months. The register is maintained by the Regional Court in Piotrkow Trybunalski and is not available in electronic form, which is one of the reasons for the long waiting time. This is a significant planning parameter that should be taken into account both in the decision to establish the foundation and in the schedule of contributing assets and launching the distribution policy.
Maciej Pilarek, attorney and partner at PLA.partners, points out that the length of the registration process is not an argument against the family foundation. It is, however, an argument for starting work with adequate lead time, because the family foundation is a strategic instrument, not a reactive one.
Family foundation in organisation, status until the entry
Until the entry, the family foundation operates in the form of a so-called family foundation in organisation. This does not mean inactivity. Already at this stage the foundation can begin organising its activity, conducting initial corporate actions, preparing the distribution policy and ordering its relations with the environment.
In the practice of the PLA.partners team, this stage is used so that at the moment of entry into the register the foundation is fully ready to conduct ongoing activity. PLA.partners experts design an action plan for the family foundation in organisation in a way that allows the waiting time to be used constructively.
Impact of the waiting time on succession and transactions
A long waiting time for the entry matters for succession planning and for ownership transactions. A family foundation should be set up with adequate lead time before the planned changes in assets, such as contributing shares in companies, real estate or an investment portfolio. An attempt to establish a family foundation at the last moment, shortly before a planned transaction or life event, usually does not work.
In projects conducted by PLA.partners, this parameter is analysed at the level of the client’s strategy. PLA.partners experts advise that the decision on a family foundation should be taken with the full implementation cycle in mind, covering preparation of the statute, establishment of the foundation, its registration and launch of the distribution policy.
Legal and business consequences for the client
From the decision-making perspective within the family, the waiting time for the entry of a family foundation in the register means:
- the need to start the process with appropriate lead time,
- the ability to conduct activity in the form of a family foundation in organisation already before the entry,
- the need to factor time risk into succession and transactional plans,
- the need to prepare documentation before the moment of the entry,
- the ability to launch the distribution policy directly after the entry,
- the need for ongoing assessment of the real waiting time for the entry of a family foundation.
Possible actions, a plan for the business owner
In the practice of the PLA.partners team, designing the implementation of a family foundation taking the waiting time into account involves:
- analysis of the client’s succession and transactional goals,
- establishing an implementation schedule covering the full registration cycle,
- preparation of the founding documentation and the foundation’s statute,
- planning activities of the family foundation in organisation,
- preparing the distribution policy for launch after the entry in the register,
- monitoring the registration status and contact with the registry court.
Contact PLA.partners Law Firm
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