Supervisory appeal for foundations

The supervision of foundations is carried out within the framework of a supervisory mechanism under public law, which primarily aims to realise the defined purpose of the foundation and to ensure its functioning. Although the foundation supervision complaint has not yet been explicitly enshrined in law, its basis follows from art. 84 para. 2 of the Swiss Civil Code (CC). This article obliges the supervisory authorities to ensure that the foundation assets are in accordance with the defined foundation purpose.

In addition to this direct supervision, certain third parties who have their own interest in the measures required of them also have the possibility of lodging a complaint with the competent supervisory authority against unlawful conduct or conduct contrary to the articles of association by the foundation bodies. The necessity for such complaint possibilities arises from the fact that without them no legal remedy would be available against actions of the foundation bodies that are contrary to their duties.

Case law has established some guidelines for the legitimacy of filing a foundation supervisory complaint. In various decisions, the Federal Supreme Court has emphasized that any person who has a “special proximity” to the foundation and is particularly affected by a contested decision should be legitimized to file a complaint. This may include not only potential beneficiaries but also foundation board members and founders. The legitimacy of other persons is assessed in the specific individual case.

The forthcoming revision of the foundation law, which will come into force on 1 January 2024, is intended to provide for a clearer legal regulation. Instead of a vague “legitimate control interest”, the law will now provide for a conclusive list of persons who may lodge a complaint. In addition to the founders and foundation board members, this also includes beneficiaries and creditors of the foundation. Although this new regulation could in theory provide more legal certainty, there is already criticism of the wording of the new article. In particular, it is criticised that the list of parties entitled to appeal is too narrow and that the criterion of a “simple interest” for the legitimacy of appeal is considered too loose.

In the context of supervision and legal complaints, it is also important to emphasize that the supervisory authority can scrutinize not only actions contrary to law and the articles of association but also any form of abuse or impermissible discretion in decisions of the foundation bodies. This includes any foundation board decisions and actual actions of the foundation board. However, as foundations enjoy a certain degree of autonomy in their decision-making, it remains a continuous challenge for the jurisdiction to find the right balance between autonomy and supervision.