Las fundaciones-Prof. María Roxana Salazar

Foundations as Legal Entities

Overview of Foundations

• The class aims to explain the concept of foundations as legal entities, highlighting their classification under civil and commercial law.

• According to Article 145 of the Civil and Commercial Code, legal entities are divided into public and private categories, with foundations falling under private entities as per Article 148.

Definition and Characteristics

• Article 193 defines foundations as non-profit legal entities established for a common good through contributions from one or more individuals.

• Foundations must be created via a public instrument and require state authorization to operate legally.

• A foundation is characterized by its unilateral creation, meaning it can be established by a single founder without needing multiple parties' consent.

Structure and Functionality

• Unlike associations, foundations do not have members; they exist solely based on the founder's intention.

• Once established, the founder becomes an outsider to the foundation, which operates independently with its own governing structure.

Beneficiaries and State Role

• Foundations serve beneficiaries who receive benefits from its activities but do not form part of the entity itself.

• The purpose of a foundation is altruistic; all activities aim at benefiting others rather than generating profit.

Establishment Process

• The state plays a crucial role in authorizing and overseeing foundations due to their lack of member oversight.

• To establish a foundation according to Article 195, it must be done through a public instrument that includes specific details about the founder(s), purpose, assets, duration, etc.

Regulatory Requirements

• The founding document must be submitted for approval by relevant authorities (e.g., General Inspection of Justice).

Understanding the Structure and Control of Foundations

Key Requirements for Establishing a Foundation

• The legal framework governs the dissolution and liquidation of foundations, emphasizing the need for an initial endowment to gain state authorization.

• The foundation's assets must reasonably enable it to fulfill its altruistic objectives as outlined in its statutes, which focus on common good and assistance to others.

• Contributions to the foundation can vary in nature, including monetary sums or securities that must be deposited in a bank designated by the controlling authority.

Statutes: The Governing Document of a Foundation

• The statute is defined as a public instrument that regulates the internal operations of the foundation; it must be documented in writing.

• Essential elements of the statute include details about founders, foundation name and address, purpose (which should always aim for common good), and initial asset composition.

• It also specifies duration, governance structure, and how management is organized within the foundation.

Governance Structure of Foundations

• According to Article 201 of civil law, governance is managed by a board known as the council of administration.

• This council consists of three individuals whose primary role is ensuring that the foundation meets its established objectives.

• The council serves as the highest governing body responsible for decision-making regarding assets, amendments to statutes, or potential dissolution.

Roles Within the Council

• The council's roles are divided among a president, secretary, and treasurer; all positions are honorary without salary compensation.

Oversight Authority for Foundations

• Once established, foundations require state authorization to operate legally; they are subject to ongoing oversight due to their lack of member control mechanisms unlike associations.