Foundation - Ownership Information
Information contained on these pages references Guernsey legislation for Registry products and services. Further details and information regarding the requirements of other Bailiwick legislation can be found on the Guernsey Financial Services Commission website http://www.gfsc.gg/FCA/Pages/Handbook-and-Regulations.aspx
Beneficial Ownership - Who really owns a legal entity?
(n.b a glossary of terms is available at the end of this document)
The Beneficial Ownership Regime as it applies to Foundations.
Unlike the company law, The Foundations (Bailiwick of Guernsey) Law, 2012 does not have specific sections on beneficial ownership. Instead the legislation requires that only a Guernsey licensed fiduciary can apply to register a foundation. [Schedule 1 section 7(2) of the Law].
In addition a foundation must, at all times, have a foundation official who is a Guernsey licensed fiduciary, and if not it must have a resident agent. [Part I, section 12 of the Law].
Accordingly these Guernsey licensed fiduciaries must act in accordance with their license conditions as stipulated in the GFSC Regulatory Laws and AML/CFT regimes that govern their activities, practices and procedures.
The Law sets out certain functions and obligations on the foundational officials and resident agent, as per Part I sections 9, 10, 11 and 12. Section 19 onwards sets out specific duties including to act in good faith, not to profit from office, to provide information within 3 months of such a request, and to maintain the records of the foundation at the registered office.
The records of the foundation include all documents filed with the Registrar, the constitution, the accounting records and all document required to be kept by the foundation in accordance with any enactment.
A foundation shall at all times have a registered office in Guernsey.
The Registrar of Foundations has the same functions and powers as those conferred on the Registrar of Companies. Accordingly he can request information from foundation officials.
A person who provides false or misleading information to the Registrar in respect of a foundation under the provisions of the Law is guilty of an offence. [Part IV, section 47(1)].
A foundation official who fails to provide the Registrar with any information in his possession knowing or having reasonable cause to believe:-
· that the information is relevant to the exercise by the Registrar of his functions under the Law; and
· that the withholding of the information is likely to result in the Registrar being misled as to any matter which is relevant to and of material significance to the exercise of those functions in relation to the foundation or foundation official,
is guilty of an offence.
Schedule I, section 5 (2) provides for circumstances where the Registrar can disclose information he holds, or has obtained, for the purposes of investigation, prevention or detection of crime or with a view to the instigation of any criminal proceedings in the Bailiwick or elsewhere.
The FATF 40 Recommendations
The FATF have put forward a series of 40 Recommendations (The Recommendations) that function as a comprehensive and consistent framework of measures with the objective of combating money laundering and terrorist financing.
Countries are 'encouraged' to implement the recommendations, although it is recognised that Countries will have diverse and varying legal, administrative and operations frameworks for managing their financial systems. Accordingly the recommendations act as a set of 'minimum' international standards for Countries to implement via measures adapted to suit their particular regimes and circumstances.
The recommendations address a number of measures and topics. For the purposes of the Guernsey Registry the significant recommendations relate to enhancing transparency and the availability of beneficial ownership information relating to the legal entities administered through the Guernsey Registry.
Glossary of Terms - Foundations
Beneficiary - is a person who may benefit from a foundation and who is identified by name in the foundation constitution, or whose identity is ascertainable from the terms of the constitution by reference to a class of persons.
Constitution - comprises of the charter and the rules of the foundation.
Default recipient - may be identified in the constitution as the person to whom all the foundation assets shall pass in the event of the termination of the foundation. If there is no default recipient all assets and property shall become bona vacantia belonging to the Crown. The default recipient has no interest in the foundation and is not a participant of the foundation.
Foundation Officials - includes the councillors and/or guardian of the foundation.
Founder - is the creator of the foundation who endows it with its initial capital and subscribes his name to the constitution of the foundation, in compliance with the requirements of the Law. A founder may also be a beneficiary of the foundation.
Guernsey Foundation - a legal entity, which has separate and independent legal personality from the founder, which is created upon its establishment and registration as per the requirements of The Foundations (Guernsey) Law, 2012.
Resident Agent - a foundation must have a resident agent if, at any time, there are no foundation officials (councillors and/or guardian). The resident agent must be resident in Guernsey and a Guernsey licensed fiduciary as per the Regulation of Fiduciaries, Administration Businesses and Company Directors, etc. (Bailiwick of Guernsey) Law, 2000.
