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What is a Foundation?

These guidance notes do not constitute legal advice and should not be relied upon as such. The interpretation of legislation is a matter on which the Guernsey Registry cannot advise and entities/individuals need to form their own independent view on compliance with the legislation. Legal advice should be obtained where there is any uncertainty.

A Guernsey foundation is a flexible structure which is neither a trust nor a company but combines features of both. Upon establishment, a Guernsey foundation has legal personality separate and independent from its founder, foundation officials and beneficiaries, with a continuous existence until it is removed from the Register.

A foundation must have a purpose, which cannot be the carrying out of commercial activities and, as such, Guernsey foundations are typically established for holding or administering assets or for charitable or philanthropic purposes.  

One or more founders endow the foundation with initial capital to be used for the specified purpose set out in the foundation's constitutive documents - the Charter and Rules. A founder does not have any interest in a foundation by virtue only being its founder, or by endowing it with property.

The foundation is administered by its council according to its Charter and Rules. Councillors owe various duties to the foundation, such as to act in good faith in exercise of their functions.  Whilst a Guernsey foundation has separate legal personality, like a company, it has no shareholders. Instead, it may have beneficiaries, who have different rights depending on whether they are "enfranchised" or "disenfranchised" beneficiaries. If the foundation has a purpose in respect of which there are no beneficiaries, or there are disenfranchised beneficiaries, the foundation must have a guardian.

Unless exempt from the requirement, Guernsey foundations must have a resident agent who is either a Guernsey resident individual or a corporate services provider.

The Foundations (Guernsey) Law, 2012 sets out the legal framework for establishing and operating a foundation.