KNOWLEDGE|
(1) |
A FC does not have to have members/shareholders following incorporation. This feature enhances continuity and control, particularly in relation to succession planning and asset protection. Where an FC ceases to have members (as is typically the case), it must have at least one supervisor, whose role is akin to that of a trust protector, overseeing the directors and safeguarding the FC’s objects.
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(2) |
The founder of a FC has the power to designate people as beneficiaries, in a manner that is much more familiar to the trust’s world. |
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(3) |
Directors manage the operations of an FC’s business and are subject to their duties as directors of companies. |
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(1) |
special purpose vehicles in finance transactions |
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(2) |
philanthropy vehicles |
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(3) |
succession planning and asset protection vehicles. |
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(1) |
FC is a body corporate with limited liability, and it can enter into transactions with third parties. |
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(2) |
FC is easier to change management, i.e. directors. For trust, an indemnity on changes of trustee could be required. |
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(3) |
The foundation itself owns the property, while for a trust, the property is under trustee’s name and needs to be transferred to new trustee which could incur complicated processes and tax related issues. |
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(4) |
The founder decides who beneficiaries are and what rights (if any) beneficiaries have. |
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(5) |
There is no risk of invalidity – the certificate of incorporation is conclusive evidence of its existence and that it is a foundation company. |
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(6) |
A FC may be registered as a private trust company, which is widely used in private wealth planning as trustees of family trusts, offering great flexibility and control over their management. |
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(7) |
FC is a type of company thus it has greater certainty and has greater flexibility in relation to the use of arbitration or any other lawful method to resolve disputes. |
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(1) |
The company is limited by shares or by guarantee, with or without share capital. |
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(2) |
The company’s secretary is a qualified person (holds a Company Management Licence). |
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(3) |
The company has a memorandum that states that the company is a foundation company and prohibits dividends or other distributions of profits or assets to its members. |
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Disclaimer All information in this article is only for the purpose of information sharing, instead of professional suggestion. Kaizen will not assume any responsibility for loss or damage. |
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