Our legal system regulates a plurality of bodies through which it is possible to carry out certain activities for the realization of specific objectives which, although they can also be pursued by individuals, are more easily achievable through an organized structure.
These aims can be achieved through subjectively based entities, such as associations and companies, or through the creation of a destination constraint to be imprinted on an asset to achieve a certain objective.
IThis second definition also includes the object of this investigation: the Foundation.
It represents an organized body, endowed with its own legal personality and characterized by assets for the pursuit of a non-profit purpose.
More precisely, it is a body through which the constitution guarantees to a subject, the founder, the possibility of seeing a specific activity exercised for the pursuit of idealistic purposes.
The foundation is governed by Book I, Title II, Chapter II of the civil code (articles 14-35) whose provisions on the subject have been partially repealed by the recent Presidential Decree n. 361 of 10 February 2000[1].
[1] For a complete study on foundations see: GALGANO “Civil and commercial law”, Volume I, Cedam, Padua, 2004; GALGANO "Of legal persons" in Commentary Scialoja-Branca under articles 11-35, Zanichelli, Bologna, 1976; GALGANO "Private law institutions", Cedam, Padua, 2000 p. 53 ff.; GALGANO "The Foundations" in Private Law, Cedam, Padua, 1999 pag. 664 ff.; GALGANO voice "Foundation" Enc. Jur. Treccani, XIV, Rome, 1989; WHITE “The rule of law. Subjects" in Civil Law, Volume 1, Giuffrè, Milan, 1990; Foundations Documentation Center available on the website: www.fondazioni.it.
Study on the different aspects concerning the legal form of "Foundation"
The Foundation
Definition
Legal aspects
A) Constitution
B) Recognition
C) Purpose
D) Heritage
E) The rules on organization and administration
F) Supervision and control activities of the administrative authority
The different types of Foundation
A) The donor foundation and the foundation holding
B) The banking foundation
C) The family foundation
D) The trust foundation
E) The business foundation
F) Conclusions
The foundation in foreign legal systems
The operation of foreign foundations in our legal system
foreign foundations
Final evaluations
The Foundation
Definition
Legal aspects
A) Constitution
The examination of the legal aspects of the foundation requires starting from the deed with which the institution is established.
The deed of incorporation is a juridical transaction always having a unilateral character as it is perfected with the will of its author, the founder, without requiring the acceptance of other parties. The unilateral nature remains even if several subjects contribute to the formation of the declaration of will, as they come to constitute a single center of juridical attribution. The deed of incorporation is a formal act which can take the form of an inter vivos deed or a will. In the first case, the art. 14 of the civil code requires the public deed under penalty of nullity; this means that the will of the founder must result from a deed drawn up by a Notary, who in the event of non-compliance with this form, must be considered null and void of any effect and, therefore, as if it had never been stipulated.
In the case of constitution by will, the requirement of formality is respected if the founder makes use of one of the testamentary forms made available by the Italian legal system, i.e. the public will, the secret one, the holographic one or one of the special forms admitted in exceptional cases (contagious diseases, public calamities or accidents).
The deed of incorporation inter vivos is characterized by two different parts: the first, which we could define as normative, contains the set of norms relating to the functioning, organization and structure of the foundation. This part represents a sort of statute of the entity whose content is divided into essential and eventual elements.
Thus, pursuant to art. 15 of the Civil Code, the essential content, required under penalty of nullity, includes the indication of the purpose, the assets and the headquarters, the rules on the organization and administration, the criteria and methods for the disbursement of annuities.
On the other hand, the rules relating to the extinction, transformation of the entity and the devolution of its assets are included in the eventual content.
The second part represents the so-called endowment shop, ie the deed of donation which gives the foundation the necessary means to carry out its activity.
In the case of a will, the testator-founder can proceed directly to the establishment of the foundation by indicating all the essential elements pursuant to art. 16 of the civil code or can proceed indirectly through the addition of a charge, i.e. a weight, with which it is imposed on the subject charged (which, in turn, to be such must have been benefited in the same will with an attribution by way of heir or legatee) to provide for the establishment of the entity. In the case of constitution made directly by will, the deed of endowment coincides with a testamentary disposition by way of inheritance or bequest. This entails, in the case of universal attribution, the obligation to proceed with the acceptance of inheritance with the benefit of inventory pursuant to art. 473 civil code. Beneficiary acceptance requires the intervention of a Notary or the Chancellor at the District Court in which the succession was opened, preceded or followed by the drafting of an inventory containing the list of assets attributed to the foundation. Although the patrimonial disposition is to be qualified as a universal or particular attribution, not all the relative rules can be applied to the specific case; in particular, those relating to the possibility of renouncing the legacy by the foundation and the provisions that make the heir responsible, even if intra vires, for inheritance debts are deemed not applicable.
As for the deed of incorporation instead, if contained in the will, it can be included among the provisions of a non-patrimonial nature which, pursuant to art. 587 2nd paragraph of the Civil Code, can be inserted in the deeds of last will.
In both of the modalities of constitution set out above (by deed inter vivos or mortis causa), it is mainly believed that the two parties, even if connected, represent two distinct legal transactions, each characterized by its own autonomy and its own cause. However, this independence does not prevent the nullity of the deed of foundation from making the deed of endowment null and that the nullity of the latter makes it impossible to pursue the purpose.
An important difference between constitution by deed inter vivos and constitution by deed mortis causa is that contained in art. 15 of the civil code concerning the revocability of the deed of incorporation.
In the first case, the revocation can be carried out until the recognition of the institution has taken place; however, it can be precluded even before that moment if the founder has started the business.
In the case of a will, however, the general rule of the revocability of testamentary dispositions (art. 679 of the Civil Code) applies at any time during the life of the testator. This implies that the settlor can revoke the will and, with it, the deed of foundation, as long as he remains alive.
This wide faculty of revocation, connected to the importance of the actuality and freedom of the testamentary will in our system of codes, cannot be transmitted to the heirs who, therefore, starting from the death of the founder, can do nothing to modify his last will.
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