The Law on Family Foundations also regulates the issue of auditing the activities of a family foundation and the formal aspects related to it. This article will present information on the audit of a family foundation. Subsequent articles will discuss an action to revoke a resolution of a family foundation’s body, an action to annul a resolution of a family foundation’s body, and a family foundation’s information obligation to the National Tax Administration.
General information about the audit of a family foundation in Poland
According to the Law on Foundations, an audit firm or a team of auditors appointed by the assembly of beneficiaries shall audit the management of the family foundation’s assets, the incurring and fulfillment of obligations and public-law liabilities, for correctness, fairness and compliance with the law, the purpose and the documents of the family foundation.
The audit team includes a certified public accountant, tax consultant, attorney or legal counsel. The auditing firm and a member of the audit team shall have the right to request documents of the family foundation from the board of directors, including a current list of beneficiaries.
Who can audit a Polish family foundation?
An audit can be performed by a person who, during the period covered by the audit and during the audit:
- is independent of the family foundation in question,
- has not and does not participate in the decision-making process of the family foundation,
- has not provided and does not provide auditing or consulting services to the family foundation.
When is an audit conducted at a Polish family foundation?
An audit is conducted at least once every four years.
If the family foundation’s financial statements are audited in accordance with the Accounting Law, the audit shall be conducted annually before the approval of the financial statements.
According to Article 64 of the Accounting Law, the annual consolidated financial statements of capital groups and the annual financial statements of – continuing:
- domestic banks, branches of credit institutions, branches of foreign banks, insurance companies, reinsurance companies, main branches and branches of insurance companies, main branches and branches of reinsurance companies, and branches of foreign investment companies,
- cooperative savings and credit unions,
- units operating on the basis of regulations on securities trading, regulations on the provision of crowdfunding services to business ventures and regulations on investment funds and management of alternative investment funds, and alternative investment companies within the meaning of the regulations on investment funds and management of alternative investment funds,
- entities operating under the regulations on the organization and operation of pension funds,
- national payment institutions and electronic money institutions,
- joint stock companies, with the exception of companies in organization as of the balance sheet date,
- other entities that met at least two of the following conditions in the preceding fiscal year for which financial statements were prepared:
- average annual full-time equivalent employment was at least 50 persons,
- total assets of the balance sheet at the end of the fiscal year were the equivalent in the Polish currency of at least €2,500,000,
- net revenues from sales of goods and products and financial operations for the fiscal year were the equivalent in the Polish currency of at least EUR 5,000,000.
Audit report in a family foundation in Poland
The audit concludes with a report, which is submitted to the board of directors.
The board presents the report to the supervisory board. If no supervisory board has been established in a family foundation, the board of directors presents the audit report to the assembly of beneficiaries, at the next meeting.
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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 audit in 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.
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