An important issue related to the Polish family foundation is the question of legal liability of various entities associated with it.

This article will present information on legal liability in a family foundation.

Liability of the Polish family foundation for the obligations of the founder

Regarding the liability of the family foundation for the obligations of the founder:

• A family foundation is jointly and severally liable with the founder for his obligations incurred before its establishment, including maintenance obligations. This liability cannot be excluded or limited without the consent of the creditor.
•  The family foundation shall also be liable for the enforcement of the maintenance obligation incurred after its establishment that is chargeable to the founder. In the event that enforcement from the founder’s assets of the maintenance obligation arising after the establishment of the family foundation proves unsuccessful, the creditor may pursue enforcement from the assets of the family foundation.

In this case, there is no obstacle to bringing a lawsuit against the family foundation before the enforcement of the founder’s assets proves ineffective.

• The liability of the family foundation for the obligations of the founder is limited to the value of the property contributed by the founder at the time of contribution, and at the prices at the time the creditor is satisfied.

Liability founder to the family foundation in Poland

The founder of a family foundation is privileged by the provisions of the law governing Polish family foundations. According to the founder is not liable for the liabilities of the family foundation.

Civil liability for the liabilities of a family foundation in Poland

According to the provisions of the Law on Family Foundations, however, a member of the board of directors, a member of the supervisory board and a liquidator are liable for the liabilities of a family foundation:

• If an act or omission of a member of the board of directors, a member of the supervisory board, or a liquidator is contrary to the law or a provision of the statute and is culpable on the part of these persons, they are liable to the family foundation for the resulting damage. The key issue here is therefore culpability.
• Not every act (or omission) of a member of the board of directors, a member of the supervisory board or a liquidator, resulting in damage to the family foundation, will constitute a breach of due diligence by the board. According to the provisions of the Law, acting in a loyal manner towards the family foundation within the limits of reasonable economic risk should not constitute a violation of the above principle.
• If the damage was caused by several persons jointly, they are jointly and severally liable for the damage.

Criminal liability in a Polish family foundation

The provisions of the Law on Family Foundations also contain criminal penalties for certain actions. If a person who is authorized to manage the affairs of a family foundation alone or jointly with other persons, or to represent a family foundation, fails to perform the obligation to provide the National Tax Administration authority, within the time specified by the authority at its request, with the data contained in the list of beneficiaries, an inventory of property, and information about benefits or property transferred in connection with the dissolution of a family foundation (including their type, the amount of benefits or value of property, the date and manner of fulfillment of benefits or transfer of property), he is subject to a fine of 240 daily rates.

The same punishment may be meted out to a person who obstructs or frustrates the performance of the obligation indicated above.

On the other hand, whoever, being authorized to manage the affairs of a family foundation alone or jointly with other persons or to represent it, gives false information as indicated above shall be subject to a fine of 360 daily rates.

Liability for liabilities of a family foundation in Poland removed from the register

If a family foundation is dissolved during the life of the founder then:

• the founder solely entitled to receive property in connection with the dissolution of the foundation, or,
• the founders (when there is more than one) in proportion to the value of the property contributed or
• any other person (especially the beneficiaries) named in the family foundation’s charter entitled to property in connection with the dissolution of the family foundation

shall be liable from the acquired property for the liabilities of the family foundation removed from the register of family foundations. This liability is limited to the value of the property received at the time of acquisition, and at the prices at the time the creditor is satisfied.

Are you planning to establish a family foundation in Poland? Or do you have doubts about the legal liability of a family foundation? We can help you!

If you are planning to establish a family foundation in Poland, would like to structure your business and are wondering whether a family foundation is a good solution for you or maybe you have questions about the legal responsibilities of a family foundation – contact us.

We’ll answer all your questions, help you decide if a family foundation is the solution for you, and, if necessary, guide you through the process of creating a family foundation or further structuring activities.                

Our team has many years of experience in building legal structures in business using both Polish and foreign instruments. We have also been dealing with the subject of family foundations in Western European countries for years. Taking advantage of our help on the issue of a Polish family foundation is the best choice.