What are the reasons for the liquidation of the foundation?

According to Art. 15 of the Law of April 6, 1984. on foundations “in the event that the purpose for which the foundation was established has been achieved, or in the event that the foundation’s funds and assets are exhausted, the foundation shall be liquidated in the manner specified in the statute. If the statute does not provide for the liquidation of the foundation or its provisions in this regard are not implemented, the competent supervisory authority over foundations shall request the court to liquidate the foundation.” Article 13 of the law stipulates that the supervisory authority is the competent minister for foundations with at least a provincial scope and the competent district governor for foundations operating in a single county.Further provisions of Art. 15 of the Law stipulates that in cases other than those provided for in paragraph. 1 the liquidation of the foundation can only take place under a provision of the law. If the statute of the foundation does not specify the use of the assets remaining after its liquidation, the court shall decide on the use of these assets, taking into account the purposes that the foundation served.As can be seen from the above, the Law on Foundations provides for two events that result in the liquidation of the foundation: the achievement of the purpose for which the foundation was established, or the exhaustion of the foundation’s funds and assets. There is sometimes a view in the doctrine that “for a foundation to cease to exist, it must exhaust absolutely everything and not even have claims on third parties.” However, the prevailing position is that liquidation may take place not only in the event of complete exhaustion of financial resources and assets, but also in the event that they diminish so much that the continuous (permanent) implementation of the foundation’s goals is impossible. This is because the law speaks of exhaustion, not the complete exhaustion of the foundation’s funds and assets.The purpose of liquidation proceedings is to satisfy the creditors of the liquidated entity. It is therefore impossible to achieve this goal when there are no assets from which creditors can be satisfied.

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