Court-approved amendment of a foundation declaration under section 33 PSG

After the private foundation has come into existence, the founder may amend its declaration only if that right was reserved. The scope, any requirement for joint exercise and the limits of the right follow from the law and the specific documents. Where there are several founders, it must also be established whether they can act only jointly and whether all of them are still able to participate.

If an amendment by the founder is impossible because a founder has ceased to exist, several founders cannot agree or no amendment right was reserved, the foundation board may act under section 33(2) PSG. This power is not an equivalent substitute for a founder right. It is subsidiary and permits only an adjustment to changed circumstances while preserving the foundation purpose.

Our overview of founder rights, amendment and revocation explains the reserved-rights position. With a board amendment, the focus changes. The task is not free structuring but the necessary continuation of the original founder intention.

According to Austrian Supreme Court case law, it is not enough that the world, tax law or the family situation has changed in general. The change must affect the specific foundation so that the founder intention can no longer reasonably be implemented under the original declaration or so that it can be assumed the founder would have adopted a different provision in the new circumstances.

Potentially relevant situations include permanently unworkable succession rules for governing bodies, an objectively impossible procedure or structural changes that seriously prevent the foundation from pursuing its purpose under the existing text. Whether this supports an approvable amendment always depends on the declaration, the development since formation and the close connection between the problem and the proposed solution.

A mere wish to optimise, a change in personal preferences, easier administration or an attempt to resolve an interpretation dispute by rewriting the document is generally insufficient. The Supreme Court has expressly held that an ultimate beneficiary provision requiring interpretation does not by itself fall within the board’s subsidiary amendment power.

The original architecture of the foundation declaration is therefore the essential benchmark. The purpose, identifiable priorities, body structure and beneficiary scheme must be reconstructed from all available versions and formation materials.

The foundation board does not administer its own structuring preferences. It must continue the founder intention identifiable in the declaration. An amendment cannot be used to renegotiate beneficiary groups, asset dedication or the allocation of powers between governing bodies according to current majorities where the original concept provides no basis for doing so.

The proposed amendment should respond as narrowly as possible to the established functional problem. If several solutions are available, the board should explain why the selected wording best serves the foundation purpose and interferes less with the existing order than the alternatives.

Particular care is required where an amendment could give the board itself more influence, longer terms, additional remuneration or reduced oversight. The file then needs an especially clear objective justification and a traceable separation between the foundation’s interest and possible personal interests of board members.

The duties and liability risks of the body are explained in our guide to the foundation board and liability. Even a well-intentioned amendment resolution may breach duty if authority, factual basis or purpose restriction were not examined carefully.

Before applying, the board should document its authority, the existing documents, the changed circumstances and the precise proposed wording in a coherent file. This includes the relevant versions of the foundation deed and supplementary deed, applicable resolutions, evidence of the actual development and a comparison of the old and new provisions.

The commercial register court examines whether the statutory requirements are met. Approval under section 33(2) PSG is mandatory. An internal resolution or a notarially prepared amendment does not replace it. The application must show why the founder route is unavailable, which circumstances have changed and how the proposed wording preserves the purpose.

Under section 33(3) PSG, the foundation board files the amendment of the foundation deed with a certified copy of the amendment resolution and files the fact that the supplementary deed was amended. The amendment becomes effective only upon registration in the commercial register. Until then, the previous version remains authoritative.

The legislation does not provide a single fixed processing period for this procedure. Missing documents, unclear facts or an overly broad draft can lead to requests for improvement and further submissions. An early explanation built around the precise documents reduces avoidable procedural loops.

A complete file should contain every relevant version of the foundation documents, the current commercial register record, materials on the availability or loss of founder rights, a chronology of the changed circumstances, the board resolution, a comparison version of the text and the legal reasons. Economic or organisational changes should be supported by the relevant contracts, resolutions or records.

A common error is to jump directly from the current problem to the preferred wording. The proof of the board’s subsidiary authority and the link to the original founder intention are then missing. Collective amendments are equally risky where further provisions are changed merely for convenience alongside one necessary adjustment.

A founder’s incapacity is not automatically equivalent to that founder ceasing to exist under the case law. Nor does disagreement among several founders give the board a free hand. In every case, the file must still establish changed circumstances, preservation of purpose and a draft that does not merely favour one side of a conflict.

Our article on reserving founder rights shows how amendment questions can be prepared at formation. Once that structuring space is no longer available, the quality of the evidence determines the court-approved adjustment route.