Beneficiaries and information rights
Beneficiaries have rights: information about the foundation, inspection of the foundation declaration and remedies when the board blocks or distributions stop.
Beneficiaries are the purpose of most private foundations, but the law deliberately gives them a weak position: no ownership, no seat on the board, often not even an enforceable claim to distributions. All the more important are the rights that beneficiaries do have. We enforce them.
The central tool is the statutory right to information: beneficiaries may demand information on the fulfilment of the foundation purpose and inspect the key documents of the foundation. If the board refuses, the court decides.
Who is a beneficiary
A beneficiary is anyone designated as such in the foundation declaration or determined by the body provided for this. Foundation declarations often distinguish between current beneficiaries, potential beneficiaries and ultimate beneficiaries to whom the assets fall on dissolution.
Even the question of who belongs to the group of beneficiaries at all is frequently disputed in family foundations, for example in the case of in-laws, adopted children or after divorces. The interpretation of the foundation declaration decides.
The information right and its enforcement
Beneficiaries are entitled to information on the fulfilment of the foundation purpose and to inspect the financial statements, the audit report, the books and the foundation declaration including the supplementary deed. The claim exists regardless of whether distributions are currently flowing.
If information is withheld, the court can enforce it on application in non-contentious proceedings. Refusal can also be a building block for further steps, for example a special audit or an application for removal of the board.
- Inspection of foundation deed and supplementary deed
- Inspection of the annual accounts, management report and audit report
- Information on the fulfilment of the foundation purpose
- Judicial enforcement in non-contentious proceedings
Distributions: entitlement or discretion
Whether a beneficiary can enforce distributions depends on the foundation declaration. If it grants a specific claim, the claim can be enforced. If it leaves distributions to the discretion of the board, the review is limited to whether the discretion was exercised properly and without arbitrariness.
When distributions are suddenly cut back or individual beneficiaries are overlooked, we examine whether that is covered by the declaration and which steps against the board or the advisory board are possible.
This overview reflects the Austrian legal position under the Private Foundation Act (PSG) and does not replace advice in the individual case. The specific circumstances of your foundation are always decisive.
What clients often ask.
The board is not showing me the supplementary deed; do I have to accept that? +
Am I entitled as beneficiary to regular distributions? +
Who has jurisdiction if there is a dispute? +
Can I also request information as a potential future beneficiary? +
This may also be relevant to you.
Formation and foundation deed
Setting up with a clear architecture: foundation deed, supplementary deed, governing bodies and asset endowment drafted so the foundation delivers what the founder intended.
Founder rights, amendment and revocation
Reserved founder rights secure influence: amending the foundation declaration, revoking the foundation and the limits where several founders are involved or rights have lapsed.
Foundation board and liability
Appointment, removal, remuneration and liability of the foundation board: duties of care, conflicts of interest and responsibility towards the foundation.
Conflict in the foundation, a blocked board, information denied?
In foundation law, structure, deadlines and evidence decide. Call us directly or write to us, callback within one business day.
Direct line to the firm.
Address
BRANDAUER Rechtsanwälte GmbH Giselakai 51 5020 Salzburg
Phone
+43 662 6280000