Revision of the law on foundations 2024

The Swiss foundation law was passed by parliament on 17 December 2021 after about seven years of parliamentary debate. The amendments will come into force on 1 January 2024 and bring with them some significant innovations to make the foundation system more modern and efficient. The aim is to strengthen Switzerland as a foundation location.

Introduction of organisational changes

The new foundation law grants the founder additional rights. Whereas under the old law the founder was only able to change the purpose of the foundation if he explicitly reserved this right, the revised foundation law now allows so-called organisational changes by the founder, provided they are reserved in the foundation deed and at least ten years have elapsed since the last change requested by the founder. Conceivable changes are, for example, changes in the structure of the governing bodies.

Insignificant amendments to the foundation deed

In addition, the conditions for insignificant amendments to the foundation deed have been relaxed. As of the entry into force of the revision on 1 January 2024, such amendments are permitted, provided that they are objectively justified and do not violate the rights of third parties.  Under the previous law, an amendment was only possible if it appeared to be necessary for valid factual reasons. The revision has thus lowered the hurdles for such amendments.

Clarification of the formal requirements for amendments to deeds

The revision clarifies that amendments to the foundation deed decreed by the competent federal, cantonal or supervisory authority do not require public certification. This simplifies administrative procedures.

Foundation supervision complaint

Pursuant to Art. 84 of the Swiss Civil Code, foundations are subject to supervision by the public authorities. Among other things, the foundation supervisory authority must ensure that the foundation’s assets are used in accordance with its purposes. Third parties are granted a right of appeal to the supervisory authority. Accordingly, actions contrary to the law and the articles of association can be complained about.

Until now, this right has not been explicitly regulated by law. The right of appeal was derived from Art. 84 para. 2 CC: “The supervisory authority must ensure that the foundation’s assets are used in accordance with its purposes. Up to now, it has been disputed who should be entitled to file an appeal. NArt. 84 para. 3 now regulates this conclusively:

“Beneficiaries or creditors of the foundation, the founder, sub-founder and former and current members of the foundation council, who have an interest in the administration of the foundation being in accordance with the law and the foundation deed, may lodge a complaint with the supervisory authority against acts and omissions of the foundation bodies.”

This provision is partly criticised in the doctrine, in particular because of the narrow enumeration and the absence of the requirement of a “legitimate interest”. Nevertheless, the clear regulation represents an improvement in legal certainty, although it is still up to case law to clarify the requirements for an interest in filing a foundation supervisory complaint.

The Federal Supreme Court emphasised the necessity of a foundation supervision complaint and defined the prerequisites as well as the legitimacy to file a complaint. The possibility of a foundation supervision complaint contributes to the diligent exercise of foundation supervision.