Elements Of A Foundation
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Elements Of A Foundation
A foundation is essentially an asset holding structure but of course assets held may include shares of companies which are actively engaged in trading or investing. A foundation does have a legal personality that is recognised as an entity which can contract in its own name. This differs from a trust where the trustee (usually a trust company) is responsible. Although trusts are generally referred to by name (often referring to the settlor or the purpose of the trust) they are actually relationships whereby the trustee, an individual or a company holds assets subject to the provisions of a trust deed drawn up to reflect the wishes of the settlor. See the Zetland Guide to Trusts for further information.
The basic elements of a foundation are shown in the table below:
| Foundation | Company | Trust | |
|---|---|---|---|
| Ownership | The foundation itself | Shareholders | Trustees own assets |
| Legal Personality | Yes | Yes | No a trust is a relationship |
| Control | Foundation council | Board of directors | Trustee |
| Governance | By-laws or establishment letter | Articles of association / shareholders agreement |
Trust deed, letter of wishes |
| Additional Protection |
Founder or protector | None | A protector may be appointed |
| Life | Indefinite | Indefinite | Usually limited |
| Activity | Asset holding, making distributions |
Trading, investing, etc to earn profits and pay dividends |
Asset holding /distribution for beneficiaries |
| Costs | Relatively expensive | Fairly inexpensive | Moderately expensive |
What Is A Foundation
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Elements Of A Foundation
A foundation is essentially an asset holding structure but of course assets held may include shares of companies which are actively ...
Foundation Jurisdictions
As with any offshore situation it is important to consider the full legal and regulatory background of the jurisdiction chosen to ho...
Setting Up A Foundation
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GUIDES
Guide to Doing Business in China
Guide to Hong Kong Companies
Guide to Singapore Business Structures
Hong Kong New Limited Partnership Fund Law
Zetland\’s Personal Information Log (“PIL”)
Guide to Doing Business In UAE
Other Zetland Guides and Info Sheets available on request: Asset Protection; Belize Companies & Trusts; Belize International Foundations; Foundations; Hong Kong Trusts; Hong Kong Visas; Effective Offshore Operations; Seychelles; Mauritius; Singapore Residency; Trusts; Wills and Probate in Hong Kong; Offshore RMB and info sheet on Hong Kong company ongoing obligations.
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