A foundation is an incorporated entity with a separate legal personality. Foundations are an alternative to trusts for private, charitable or corporate clients. They serve to separates assets from the founder for confidentiality, succession planning and asset protection purposes.
Rules and a Charter are established to set out the manner in which the assets of the foundation may be distributed. The founder can be granted certain powers including the right to amend or terminate the foundation.
The foundation will be run by a council that has a duty to manage the foundation and its assets in accordance with the terms of the Charter and Rules. A guardian can also be appointed if the foundation is established for a purpose, or if the beneficiaries are disenfranchised (i.e. have no entitlement or access to information concerning the foundation). The guardian has a duty to the founder and the beneficiaries and should ensure the council is acting appropriately.
Foundations can be established for the benefit of families or individuals or for private or for charitable purposes. A charitable foundation can be registered as a charity if its sole purpose is to benefit charities or charitable work. Organisations with registered charitable status cannot use assets for any purpose other than the pursuit of charitable objectives.