1. A cseh trust és a magánalapítvány működésének tanulságai Czech trust fund vs. (private) foundation fund
Doc. JUDr. Kateřina Ronovská, PhD.
Faculty of Law, Masaryk University, Brno, Czech Republic

2. Outline Functional approach Foundations for private purposes ?
Historical background
Functional approach
Foundations for private purposes ?
Trust/trust fund
Just the same but better/different?
Czech example: Foundation fund vs. Trust fund
Conslusions, references

3. Historical background
Foundations only for public benefit pursposes
Foundation – concept of legal person (Savigny, german jursprudence)
First models foundations of private purposes – Lichtenstein 1926
2017: Austria, Belgium, Czech rep., Hungary, Italy, Malta, The Netherlands, Sweden, Latvia, Switzerland, Germany ……
see: ighlights%20of%20Foundation%20Laws.pdf)
Trusts in common law – attractive instrument also in „ius commune“
countries

4. Trust/trust LIKE FORMS IN EUROPE: just the same as (private) foundation but better?
TRUSTS (TRUST LIKE FORMS) ARE „ALIEN“ TO THE „IUS COMMUNE“ LEGAL TRADITION
FLEXIBILITY OF PURPOSE AND STRUCTURE
LACK OF LEGAL PERSONALITY
NO EXPERIENCE, UNTRIED, UNUSUAL
NO CASE LAW
UNCERTAINITY, LACK OF RECOGNITION IN OTHER LEGAL REGIMES (IF NOT SIGN HAGUE CONVENTION FORM 1985)
TENDENCIES TO DEAL SIMMILAR AS TO LEGAL PERSONS

5. Private foundations IN EUROPE: just the same as trust but better?
+/- THEY ARE LEGAL PERSONS
+/- POSSITION OF THE FOUNDER: allow arrangements that can achive the same purposes and founder can enjoy a higher „flexibility“ – but limits!
FOUNDATIONS ARE „ALIEN“ IN COMMON LAW
LACK OF RECOGNITION IN CERATIN JURISTICTION (CASE LAW IN GERMANY, SPAIN, ENGLAND)
EXAMPLE: OGH Stuttgart 26/6/2009 U 40/09 refused to enforce the terms of Lichtenstein foundation, because of the extent of the powers of retained by the founder – does not function as asset proteciton tool!!

6. Czech republic: trust fund vs. Foundation fund
Legal framework
§ 349, legal person
§ 1448, ?
Ownership of property
Foundation fund -
Character
Status
obligational/substantive legal
Establishment – legal grounds
unilateral expression of will (deed of establishemnt) - inter vivos/mortis causa
Contract - inter vivos/
Unilateral expression of will mortis causa

7. Czech republic: Foudation fund vs. Trust fund
Creation
Entry in register of foundations
accepting authorization for administration - inter vivos/
death of founder - mortis causa
(form – registry of trust funds)
Purpose
economically or socially useful, not entrepreneurship (publicly and privately beneficial)
publicly and privately beneficial, also entrepreneurship
Nature of administration
not administration of property of others
full administration of property of others
Role of founder
at beginning/ for duration limited, but possible according to deed
according to statute and law (significant influence – possibility of removing /appointing administrator)

8. Czech republic: foundation fund vs. Trust fund
Time restriction
definite/indefinite
definite/ indefinite, limited to max. 100 years + remainder of life of beneficiary
Position of beneficiaries
in deed of establishment
in statute
Monitoring
court, board of supervisors or auditor, other persons if stipulated by founder
court, beneficiaries, other persons if stipulated by founder
Termination/dissolution
achievement of purpose, expiry of term, decision by administrative board on impossibility of achieving purpose, court authoritatively (on date of legal force of decision), dissolution: removal from public registry
termination of administration on basis - fulfilment of purpose, expiry of term, court authoritatively, waiver of entitlement with all beneficiaries (private trust fund)

9. Czech republic: foundation fund vs. Trust fund
Settlement of property after dissolution
Who determined in deed of establishemnt, if no-one state
who determined by founder in statute, otherwise beneficiary, if not founder, if not state, with publicly beneficial funds court can rule otherwise
Form
written form
informal contract, statute in form of notarial deed
Designation
„Nadační fond“
„Svěřenský fond“

10. Conclusions

11. references
Havel, B., Ronovská, K.: New Instruments of the Fiduciary Administration of Assets after the Recodification of Private Law in the Czech Republic – Foundation fund, Trust fund, Affilitated fund´ in: Hüttemann, R., Rawert, P., Schmidt, K., Weitemeyer, B.: Non Profit Law Yearbook 2013/2014, Bucerius Law School, 2014, Hamburg 177 – 190
Ronovská, K. Foundations in the Czech Republic: Yesterday, Today and Tomorrow in: Prele Ch (eds.): Developments in Foundation Law in Europe, Springer, 2014, p. 35 ef.
Ronovská, K., Lavický, P.: Foundations and Trust funds in the Czech Republic after recodification of Civil Law: a step forward?, Trust and Trustees, Oxford University Press, , vol. 21, no. 6/2015, p
Ronovská, K. „Svěřenský fond“ (Trust fund): a Daring New legal transplant in Czech Law, in: Farran S., Gallen, J., Hendry, J., Rautenbach, Ch., The Diffusion of Law, Ashgate, UK, , p
Ronovská, K., Lavický P.: New Czech Foundation and Trust (like) Law: initial experience and reactions,Trust and Trustees, Oxford University Press, 2016.