Chapter 18 - Other Vehicles

Foundations

• A foundation is an incorporated body with separate. A hybrid between trusts and companies
• Created by founder but administered by council
• Council runs foundation in accordance with charters and regulations
• The charter is a public document that's sets out the name, duration and details of foundation, objects and member of council
• The regulations are a private document that sets out the internal rule of administration

Similarities and differences between trusts, companies and foundations

Similarities - trusts and foundations

• the founder of a foundation is similar to the settlor of a trust
• there can be beneficiaries of both a trust and a foundation
• Foundations can have guardians, which similar to enforcers of non-charitable purpose trusts

Differences - trusts and foundations

• Foundations do not have to have beneficiaries whereas a trust would fail for lack of objects
• There is no fiduciary duty owed by the council to the beneficiaries, there is a fiduciary duty owed by the trustees
• Foundations have a separate legal personality, whereas trusts do not

Similarities - companies and foundations

• Both have separate legal personalities
• The charter is similar to the memorandum of association 
• The regulations are similar to the articles of association
• The council is similar to the board of directors

Differences - companies and foundations

• There is no fiduciary duty owed by the council to the beneficiaries; there is a fiduciary duty owed by the company directors
• Foundations do not have shareholders, whereas companies do
• Foundations can have a guardian, whereas companies do not have a role similar to this
• A foundation has set objects, whereas most companies have unlimited objects

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