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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.

The founder position under Austrian law is doubly special: founder rights are strictly personal, they cannot be transferred or inherited. They also only exist to the extent they were reserved in the foundation declaration. We secure founder rights and enforce them.

Whether a foundation can later be adjusted, restructured or fully revoked is decided by the text of the foundation declaration. Where several founders are involved, the further question is who may exercise the rights jointly or alone.

Amending the foundation declaration

After the foundation has come into existence the founder can only amend the declaration if they reserved the right. The reservation must be contained in the foundation deed. Where several founders act together, in case of doubt they may only exercise the amendment right jointly.

Without an effective reservation only a narrow corridor remains: the foundation board can make adjustments to changed circumstances, but only under strict conditions and with court approval.

  • Amendment right only where expressly reserved in the deed
  • Several founders exercise reserved rights jointly in case of doubt
  • The amendment right lapses on the death of the founder
  • Board amendments only in a narrow scope and with court approval

Revocation of the private foundation

Revocation is the sharpest founder right: it leads to dissolution of the foundation and usually to the return of assets to the founder as ultimate beneficiary. It has two conditions: the founder must be a natural person and must have reserved the revocation in the foundation deed.

A legal person as founder cannot revoke the foundation, even if a reservation was formulated. Revocation is also strictly personal; heirs cannot exercise it.

Drafting and disputes about founder rights

In practice families frequently dispute whether an amendment was covered by the reservation, whether a co-founder was overlooked or whether the founder still had legal capacity when exercising the right. Such questions decide the validity of whole restructurings.

We assess the reach of reserved rights, guide amendments safely through notary and commercial register and represent founders as well as excluded parties in disputes.

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.

Frequently asked questions

What clients often ask.

Can I transfer my founder rights to my children? +
No. Founder rights are strictly personal and neither transferable nor inheritable. What you can do: shape the foundation declaration so that your children gain influence through other mechanisms, for example through nomination rights in an advisory board or as co-founders at formation.
I did not reserve an amendment right; is the foundation permanently locked in? +
Largely yes, but not entirely. The foundation board may under strict conditions make adjustments to changed circumstances that require court approval. The room for manoeuvre is markedly smaller than a reserved amendment right of the founder.
What happens to the foundation assets on revocation? +
Revocation dissolves the foundation. After winding-up the remaining assets fall to the ultimate beneficiaries named in the declaration, typically the founder themselves on revocation. The tax consequences of the return should be clarified in advance with the tax adviser.
We are several founders and disagree; who decides? +
Unless the declaration provides otherwise, reserved founder rights may only be exercised jointly. A single founder then cannot push through amendments alone. Precisely for this reason the declaration should contain majority or succession rules for the exercise of these rights.
Related topics

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.

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.

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.

+43 662 6280000 [email protected] Book an initial consultation (72 euros)

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BRANDAUER Rechtsanwälte GmbH Giselakai 51 5020 Salzburg