Private foundations are entities founded by private individuals alone or in private association. Diverse countries allow and recognize these types of foundations under diverse regulations and laws.
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Common law
USA
A private foundation, in the United States, is a charitable organization described in the Internal Revenue Code by section 509[1]. A private foundation is necessarily a 501(c)(3) exempt organization (or a former such entity). It is defined by a negative definition: by what it is not. A private foundation is not a public charity, as described in section 170(b)(1)(A) (i) through (vi). Neither is it a section 509(a)(2) organization, nor a supporting organization. [2] Private Foundation status subjects a charity to onerous excise taxes found in section 4940 through 4945 of the internal revenue code. Once a charity becomes a Private Foundation, it retains that status unless it follows the difficult termination rules of section 507.
Canada
Australia
Civil Law
Netherlands
A foundation or "stichting" in The Netherlands is a legal person created through a legal act. This act is usually either a notarised deed (or a will) that contains the articles of the foundation which must include the first appointed board. No government authority is involved in the creation or authorization of a foundation, it acquires full legal capacity through its sole creation. A foundation has no members and its purpose must be to realise a purpose stated in its articles, using capital dedicated to such goal. The foundations are defined in the Dutch Civil Code "Burgerlijk Wetboek", Boek 2 Art 285-2:285. It is not necessary in Netherlands that a foundation serves a purpose of general interest. The foundations are governed and represented by a board that is responsible for its administration, this board has not a requirement for specific number of members. The Funds or "fondsen" are almost all foundations but those must not be confused one with the other regarding their legal status. The Art 2:289 of the Civil Code establishes that all foundations must be registered in the Register of Commerce or "Handelsregister". Commercial activities are allowed if they are within the purpose of the foundation and are taxed. Board members can be held liable for the foundation, civilly as well as criminally.
Sweden
A private foundation in Sweden (Stiftelse) is formed by a letter of donation from a founder donating funds or assets to be administered for a specific purpose. A private foundation may have diverse purposes, including but not limited to collective, familiar, or the purpose of passive administration of funds. Normally, the supervision of a private foundation is done by the county government where the foundation has its domicile, however, large foundations must be registered by the County Administrative Board (CAB), which must also supervise the administration of the foundation. The main legal instruments governing private foundations in Sweden are those that regulate foundations in general: the Foundation Act (1994:1220) and the Regulation for Foundations (1995:1280).
See also
References
- ^ http://www.law.cornell.edu/uscode/uscode26/usc_sec_26_00000509----000-.html 26 USCA 509
- ^ http://www.irs.gov/charities/charitable/article/0,,id=96114,00.html IRS webpage, which defines private foundations
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