Private foundation assets below EUR 70,000: board duties, additional contribution and dissolution

Section 4 PSG requires assets worth at least EUR 70,000 to be dedicated when a private foundation is formed. This rule describes the statutory endowment at formation. It is not a general statement about the legal consequence of every later reduction in value.

The amount may later be exceeded in the other direction or fall below it because of a permitted distribution, operating costs, an asset loss or a changed valuation. The board must therefore distinguish an actual change in value from an asset transfer and from a valuation that no longer reflects the position.

An asset floor set in the foundation deed is a separate issue. Section 9(2) no. 11 PSG permits a provision under which distributions to beneficiaries may not reduce a specified asset level. Whether that clause applies can be established only from the effective version of the deed.

Under section 17 PSG, the foundation board manages and represents the private foundation. It must comply with the foundation deed and assess the situation with the care of a conscientious business manager. A reduction below the amount must therefore be addressed, not answered with a general promise to restore the assets.

The file should first contain a current asset and liquidity overview. It should separately show assets, liabilities, encumbrances, recurring costs, due payments and realistically available funds. For fluctuating assets, the valuation date and method should be recorded.

The board must then examine whether the reduction resulted from an earlier decision and whether that decision was documented and compatible with the deed. If a current crisis exists, the foundation's obligations and insolvency-law issues must be assessed independently. The EUR 70,000 figure does not replace that review.

An additional contribution means that further assets are dedicated to an existing private foundation. It is distinct from formation and does not automatically make the contributor a founder. Its permissibility and practical execution depend on the foundation deed, the asset involved and the competent decision-making process.

The board should first establish whether the deed provides for or permits additional contributions. It should also review the source and ownership of the assets, their valuation, encumbrances, purpose allocation, transfer form and any registration or contractual steps. A promise without a completed transfer does not yet change the asset position.

An additional contribution cannot conceal a crisis that already exists. If liquid funds do not cover due obligations, the board must review the Insolvency Code and creditor interests independently of any expected asset contribution. An additional contribution is a concrete asset transaction, not a substitute for a crisis decision.

Section 35 PSG lists the statutory grounds for dissolution. They include, among other things, expiry of a stated duration, specific insolvency situations, a valid unanimous resolution of the foundation board and judicial dissolution. A fall below EUR 70,000 is not, on its own, listed as a general automatic ground for dissolution.

The board must nevertheless examine whether the actual position engages another ground. This may occur if a deed-based ground has arisen, the foundation purpose has been achieved or is no longer attainable in the long term, or an insolvency proceeding is opened or finally refused for lack of assets covering costs. These grounds must remain distinct.

If a ground exists, the resolution, register filing and winding-up procedure follow sections 35 to 37 PSG. A premature dissolution without a sound basis may itself become disputed. The article on dissolution and winding-up of a private foundation explains that process in detail.

The file should contain the current foundation deed with effective amendments, the supplementary deed, the register extract, annual accounts, current accounting records and an asset overview divided by asset type. The cause of the reduction also requires resolutions, payment records, contracts and valuation material.

For a possible additional contribution, add proof of ownership and source, valuation, encumbrances, the transfer agreement and the review of the competent organs. For dissolution, record the statutory or deed-based ground, its factual basis and the planned register filing.

The board should expressly record which option was reviewed, why it is permitted or currently not workable and when the matter will be revisited. This makes clear whether the foundation is continuing, preparing an asset contribution or opening a dissolution review.