LUXEMBOURG Law and Practice Contributed by: Frédéric Feyten, Alejandro Dominguez Becerra, Gérard Maîtrejean and Pawel Hermeliński, CMS
as possible to the purpose for which the dissolved foundation was created. As the purpose of the foundation is mentioned in its articles of association, it could not, for example, allo - cate its assets or income to a purpose other than that for which it was set up without risking a dissolution pronounced by the court (judicial dissolution). If the incorporation of a foundation needs to be made by authentic Will, the testator can appoint an executor who will take care of the steps. Following its incorporation, the foundation shall be registered with the Luxembourg Trade and Companies Register under a registration fee of EUR14.61. Management The foundation is managed by a board of directors composed of at least three directors. The board of directors of the foundation has the power to perform all acts necessary or useful for the achievement of the purpose for which the foundation was established. The directors carry out their function, free of charge, in a collegial manner and take their decisions by a majority of the members present or represented. The members of the board of directors are appoint - ed by the board of directors, with the exception of the members of the first board of directors who are appointed by the founder. The directors may be natu - ral or legal persons, unless otherwise provided for in the articles of association. The board of directors represents the foundation vis- à-vis third parties and in court, but the articles of asso - ciation may give one or more directors the capacity to represent the foundation in legal proceedings or in court, either alone or jointly. The daily management of the foundation and its rep - resentation, regarding this management, may be dele - gated to one or more natural or legal persons, whether directors or not, acting alone or jointly.
The liability of the persons delegated to daily manage - ment is determined in accordance with the general rules of the mandate. The Foundation is bound by the acts of the board of directors, by the directors having the capacity to rep - resent the foundation in legal proceedings or in court or the persons delegated to daily management, even if such acts are beyond the purpose for which the foundation was set up, unless it proves that the third party knew that the act exceeded this purpose or that he/she could not ignore it, given the circumstances, without the mere publication of the articles of associa - tion being sufficient to constitute such proof. The foundation is liable, in accordance with ordinary law, for any misconduct attributable either to the board of directors or to its representatives. The directors and persons delegated to daily manage - ment do not incur any personal obligation in relation to the commitments of the foundation. Their liability is limited to the execution of their mandate and to the faults committed in their management. In addition, the court may, at the request of an inter - ested third party or the State Prosecutor, order the dismissal of directors who have shown negligence or incompetence, who do not fulfil the obligations imposed on them by law or by the articles of associa - tion, or who dispose of the assets of the foundation contrary to their intended purpose or for purposes contrary to public order. In this case, the new directors shall be appointed in accordance with the articles of association or, if the court so decides, by the Minister of Justice.
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