Liechtenstein Foundation: Revocation, amendment of articles of association

In principle, the founder can grant himself organisational rights such as revoking the foundation and amending the articles of association and conclude mandate agreements with the foundation’s governing bodies. It is problematic if the founderbecomes the de facto governing body or beneficial owner.

Once the foundation has been established, the founder’s will is enshrined in law.
The founder can no longer exert any fundamental influence on the foundation unless the foundation deed contains a reservation of amendment or revocation. The founder and foundation are separate under Liechtenstein law and are two independent legal entities. In principle, however, any influence on the foundation by the beneficiaries is harmless.

The exercise of organisational rights through reservations of amendment or revocation or mandate agreements must not make the founder the de facto governing body of the foundation.

Caution !  If the founder can directly or indirectly dispose of the foundation assets and their income, he is considered to be the beneficial owner. A foundation controlled in such a transparent manner can be regarded as a void sham transaction with the consequence that the legal personality is cancelled and the founder can be held liable as the owner of the foundation’s assets.

Changes to the purpose of the foundation and other contents of the foundation deed by the foundation bodies are permitted to a limited extent if the framework conditions change.

In addition, the foundation supervisory authority and all parties involved in the foundation can request changes from the ordinary courts and have them ordered by the judge.

For a non-binding enquiry, please contact us by phone or e-mail or use the contact form at the bottom of this page. We will be happy to advise you on the extent to which a revocation or amendment of articles of association or mandate agreements will have negative tax consequences in your country of residence.

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