Private Foundations.pdf - Mossack Fonseca & Co.

3. The Protector
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The legislation on Foundations refers to “supervisory bodies” that are made up of natural persons or
bodies corporate that may be appointed in any way. In most cases, such bodies consist of one sole
person that we call the “Protector.”
In practice, the Protector is usually the client himself or someone he trusts. His functions are
specified in the Foundation Charter. His main functions are the supervision of the Foundation Council,
demanding and receiving the Statement of Account, adding or removing beneficiaries and authorizing
the acts of the Foundation Council.
The laws on Private Foundations make no reference whatsoever to the Protector’s liability vis-à-vis
third parties who have an interest in the Foundation.
4. The Beneficiary
The Foundation’s aims and objectives consist, in the last instance, in benefiting the foundation’s
“Beneficiary” or “Beneficiaries.” Such Beneficiaries have the right to receive the earnings or interest
earned by the Foundation Assets, and to receive the Foundation Assets upon fulfillment of the
conditions set down in the Foundation Charter.
The Beneficiaries may be natural persons or bodies corporate and are appointed in the Foundation
Regulations.
The Beneficiaries may sue the Foundation in exercising their legitimate rights concerning the
Foundation Assets, demand the judicial removal of the Foundation Council members, demand the
rendering of accounts and object to any acts of the Foundation that impair their rights.
The Beneficiaries shall have rights concerning the Foundation Assets beyond any legal provision on
hereditary matters cited by the Founders’ heirs (save for exceptional cases of lawsuits initiated in
jurisdictions whose inheritance laws are of public order and the Foundation’s Assets are located in
such jurisdictions).
The Beneficiaries are not the Foundation’s owners or creditors, such that they may not claim rights
from it aside from those granted in the Foundation Charter, the Regulations and/or the resolutions of
the Foundation Council.
Our Standard Foundation Regulations provide that no certificates or documents on the right to benefit
shall be issued, and such right may not be given in guarantee of any kind. The client may opt to
amend such provision.
In no case may the Foundation Assets be used to answer for the Beneficiaries’ personal obligations.
By the same token, the Beneficiaries shall not be answerable for the Foundation’s obligations.
5. Third Parties
A Foundation’s personal elements are those outlined above. However, in exceptional cases, there
are “third parties” that because of specific acts are involved in a Foundation and acquire rights and
obligations vis-à-vis the Foundation or the Founders.
YA/Pub./10.2007