Procedural Pathways, Substantive Requirements, and Practical Considerations
Introduction
The Polish family foundation (fundacja rodzinna), notwithstanding its fundamental purpose of providing long-term protection for family wealth across generations, may under certain circumstances be subject to dissolution. The Family Foundation Act (Ustawa o fundacji rodzinnej) establishes multiple pathways through which this legal entity may be terminated, each distinguished by its particular prerequisites and the parties vested with authority to initiate the process. This analysis examines the tripartite framework governing dissolution, the interplay between statutory and charter-based provisions, and the practical implications for founders, beneficiaries, and fiduciaries.
I. The Tripartite Framework for Dissolution
A. The Distinction Between Material and Formal Prerequisites
A critical threshold matter concerns the relationship between substantive grounds for dissolution and the procedural mechanisms by which such grounds are actualized. The occurrence of material prerequisites enumerated in Article 87 of the Act does not, ipso facto, effectuate dissolution of the foundation. Rather, the statutory scheme contemplates a two-step process: the materialization of a substantive ground must be coupled with satisfaction of a formal prerequisite—namely, the adoption of an appropriate decision by a competent body or authority. This bifurcated structure ensures deliberate consideration before the irrevocable termination of an entity designed for perpetual existence.
B. Dissolution by Resolution of the Management Board
The management board (zarząd) possesses authority to adopt a resolution dissolving the foundation upon the occurrence of circumstances specified in the foundation’s charter. Such circumstances may include, inter alia, expiration of the period for which the foundation was established, fulfillment of the foundation’s purpose, impossibility of further pursuing that purpose, or the emergence of excessive difficulties in purpose realization where the costs of removing obstacles would be disproportionate.
Significantly, the adoption of such a resolution constitutes a mandatory duty rather than a discretionary prerogative. The assessment of whether charter-specified conditions have materialized should be conducted objectively, thereby permitting identification of the precise moment at which the board’s obligation crystallizes. The resolution requires an absolute majority of votes, unless the charter imposes more stringent requirements such as a qualified majority or quorum.
Upon adoption of the dissolution resolution, the management board must promptly notify all beneficiaries, thereby discharging its statutory duties of loyalty and due diligence. This notification requirement, though not expressly mandated for dissolution resolutions, derives from the general fiduciary obligations imposed upon board members.
C. Dissolution by Unanimous Resolution of the Beneficiaries’ Assembly
Where continuation of the foundation’s activities has become purposeless due to other important reasons (z innych ważnych powodów), the decision to dissolve vests in the beneficiaries’ assembly (zgromadzenie beneficjentów). The statutory requirement of unanimity warrants careful examination: it necessitates the affirmative vote of all beneficiaries entitled to participate in the assembly, not merely those actually present at a given meeting.
This interpretation finds support in both systematic and teleological analysis. Dissolution represents an ultimate and irreversible decision entailing the permanent loss of each beneficiary’s status and entitlements. The principle quod omnes similiter tangit, ab omnibus comprobetur counsels that such momentous determinations should require the consent of all affected parties. A resolution adopted without the participation of all entitled beneficiaries, or without their unanimous affirmative vote, should properly be characterized as legally non-existent rather than merely voidable.
Moreover, the beneficiaries’ assembly does not enjoy unfettered discretion in this regard. The resolution must identify the specific circumstance constituting the “important reason” justifying dissolution. Article 89(1)(2) does not confer upon the assembly an inherent right to determine unilaterally that continuation has become purposeless; rather, it authorizes the assembly to recognize and act upon objectively existing grounds.
D. Dissolution by Order of the Registry Court
The registry court (sąd rejestrowy) may order dissolution of a family foundation in all cases enumerated in Article 87(1)-(3), acting either upon application by a beneficiary or ex officio. Notably, the court possesses exclusive competence to dissolve a foundation that is being managed in a manner manifestly contrary to its purpose or the interests of beneficiaries—a ground for which no internal corporate resolution suffices.
The court’s order must be preceded by a mandatory hearing, underscoring the gravity of such a determination. Legislative history confirms that judicial dissolution should constitute a measure of last resort, employed only in exceptional circumstances where other remedial mechanisms have proven inadequate.
II. The Scope of Charter Autonomy
A. Dispositive Character of Internal Dissolution Mechanisms
The provisions governing dissolution by the management board and the beneficiaries’ assembly exhibit a predominantly dispositive character, affording founders considerable latitude in tailoring dissolution mechanisms to the particular circumstances of their families and assets.
With respect to board-initiated dissolution under Article 89(1)(1), the founder may modify applicable procedural rules, transfer the competence to determine whether charter-specified grounds have materialized to another body or person, or entirely exclude the board’s statutory role. This flexibility follows logically from the dispositive nature of the underlying material prerequisites: if the founder enjoys freedom to define the substantive grounds for dissolution, it would be inconsistent to deny corresponding freedom regarding the formal mechanism for their recognition.
Similarly, the requirement of a unanimous resolution by the beneficiaries’ assembly under Article 89(1)(2) may be modified or excluded by charter provision. The founder might, for instance, reduce the required majority, impose additional procedural requirements, or assign the relevant competence to a different body such as the supervisory board or the founder personally.
This dispositive characterization finds additional support in theoretical considerations. The assignment of competences to particular organs belongs to the domain of foundation governance—the internal organization and functioning of the foundation as a legal entity. Norms governing such matters are presumptively dispositive, as they do not protect public interests but rather concern the private interests of private parties.
B. Imperative Character of Judicial Dissolution Authority
In marked contrast, the provisions conferring dissolution authority upon the registry court are of an imperative character and may not be limited or excluded by charter provision. The court’s competence partakes of public authority and serves protective functions extending beyond the immediate parties—safeguarding the interests of beneficiaries, creditors, and the public at large. Were charter provisions permitted to undermine this authority, the protection afforded would become illusory.
This distinction carries practical significance: while a charter may establish additional internal mechanisms for dissolution (including mechanisms paralleling the court’s authority under Article 87(2)), it may not preclude recourse to judicial dissolution in any circumstance where such dissolution is statutorily authorized.
III. Standing to Petition for Judicial Dissolution
A. Beneficiary Standing
Every beneficiary possesses standing to file an application for judicial dissolution, regardless of membership in the beneficiaries’ assembly, the scope or value of allocated benefits, or age. This entitlement extends to beneficiaries whose sole right consists of receiving foundation assets upon dissolution—so-called “ultimate beneficiaries” who may never receive any distributions during the foundation’s operational existence.
Standing likewise extends to conditional and future beneficiaries whose status depends upon the occurrence of a specified event or arrival of a particular date. Such persons may proceed under Article 91 of the Civil Code, which authorizes all acts tending to preserve a conditional or future right. Since an unconditional beneficiary could file a dissolution application to protect their interests, the same right must be recognized for those holding conditional or future beneficiary status.
Conversely, former beneficiaries lack standing to petition for dissolution. A former beneficiary has no connection to the foundation’s current situation and cannot properly influence its present functioning, particularly regarding a matter as significant as dissolution. The grounds for dissolution must be current, existing at the time of the court’s determination, and thus cannot appropriately be invoked by persons no longer holding beneficiary status.
B. Exclusion of Non-Beneficiary Petitioners
The right to petition for dissolution does not extend to persons other than beneficiaries, even those otherwise connected to the foundation. Founders who are not beneficiaries, management board members, and supervisory board members lack standing in their own right. Given the procedural character of Article 89(1)(3), charter provisions purporting to expand the catalog of entitled petitioners are ineffective.
This limitation possesses reduced practical significance, however, given the court’s authority to proceed ex officio. An application filed by an unauthorized person may indirectly occasion the commencement of proceedings if the court determines, based on information contained therein, that sufficient grounds exist for ex officio action. Moreover, standing may derive from other statutory sources: the public prosecutor and the Commissioner for Human Rights may initiate proceedings under general procedural provisions.
IV. Protection of Minor Beneficiaries
A. Guardianship Court Authorization
Where a minor beneficiary’s consent is required for dissolution, such consent—whether given by the minor or their statutory representative—must be preceded by authorization from the guardianship court (sąd opiekuńczy). This requirement applies both to voting within the beneficiaries’ assembly and to the provision of individualized consent contemplated by charter provisions.
Consent given without the requisite authorization is void ab initio. In the context of an assembly resolution, such invalidity affects not only the authorization requirement but also the unanimity requirement, since a resolution adopted with one invalid vote cannot be characterized as unanimous. The resolution remains subject to judicial invalidation as contrary to statute.
B. Applications by Minor Beneficiaries
Notably, guardianship court authorization is not required for a minor beneficiary to file an application for judicial dissolution. This conclusion follows from both textual and functional analysis. The court does not require beneficiary consent to order dissolution; it exercises independent judgment regarding the appropriateness of that remedy. Moreover, since dissolution proceedings may be initiated ex officio, requiring authorization for a minor’s application would serve no practical purpose—the court could simply proceed on its own initiative based on the same information.
V. Special Considerations: Marital Property Division
A distinctive practical question arises when dissolution is sought in connection with the establishment of separate property regimes between spouses who contributed community property assets to the foundation. The charter may expressly provide for dissolution upon such an event, potentially specifying particular modes of establishing separate property (such as divorce or separation, but not bankruptcy of one spouse).
Even absent express charter provision, the management board might conclude that following divorce and the formation of new families, further realization of the foundation’s purpose has become impossible. Similarly, the beneficiaries’ assembly might determine that continuation has become purposeless for important reasons.
When evaluating dissolution petitions grounded in such circumstances, the registry court should consider the totality of relevant factors: charter provisions regarding benefits allocated to each spouse; the circle of foundation beneficiaries; the proportion of community property contributed relative to other marital assets; the financial circumstances of both spouses; each spouse’s influence on foundation activities; and whether the foundation structure represents an abuse designed to shield assets from equitable division.
Some commentators have questioned whether the registry court possesses competence to examine marital property relations bearing upon foundation dissolution. The better view recognizes such competence as implicit in the court’s dissolution authority: if the legislature assigned jurisdiction over dissolution to the registry court, that court must necessarily be empowered to evaluate all circumstances relevant to the statutory dissolution criteria, including the impact of changed marital circumstances upon the foundation’s viability.
VI. Procedural Aspects of Judicial Dissolution
A. Applicable Procedural Framework
Dissolution proceedings are governed by the general provisions of the Code of Civil Procedure concerning non-contentious proceedings. The registry court issues its determination in the form of an order (postanowienie), from which participants may appeal.
Given the mandatory hearing requirement, only a judge—not a court referendary—may issue the dissolution order. This follows from the principle of immediacy, which requires that the judicial officer who conducted the final hearing must be the one to render the decision on the merits.
B. Representation of the Foundation
The management board ordinarily represents the foundation in dissolution proceedings. Where the petitioning beneficiary simultaneously serves as a board member, the supervisory board assumes representative functions; in the absence of a supervisory board, a proxy appointed by resolution of the beneficiaries’ assembly fulfills this role.
VII. Practical Implications and Recommendations
A. Charter Drafting Considerations
Founders should carefully consider the extent to which they wish to modify statutory dissolution rules. Available options include restricting the competences of the beneficiaries’ assembly, introducing additional procedural safeguards, or specifying detailed charter-based grounds tailored to the family’s particular circumstances and the nature of contributed assets.
The dispositive character of most dissolution provisions affords substantial flexibility, but founders should exercise this flexibility deliberately. Overly restrictive provisions may frustrate legitimate dissolution in appropriate circumstances; overly permissive provisions may enable precipitous termination contrary to the founder’s long-term vision.
B. Beneficiary Awareness
Beneficiaries should understand their entitlements, including the right to petition for judicial dissolution independently of the positions adopted by other beneficiaries or foundation organs. This right serves as a crucial safeguard against potential abuses by controlling parties.
C. Board Obligations
Management board members must recognize the mandatory character of dissolution resolutions when charter-specified grounds materialize. Failure to act may expose board members to liability and permit affected parties to challenge the so-called “negative resolution”—the implicit decision not to adopt a dissolution resolution despite the existence of a duty to do so.
Conclusion
The Polish Family Foundation Act establishes a nuanced framework for dissolution that balances respect for founder autonomy against protection of beneficiary interests and public policy concerns. The tripartite structure—encompassing board resolution, assembly resolution, and judicial order—provides multiple pathways to dissolution while ensuring that this irrevocable step receives appropriate deliberation.
The predominantly dispositive character of internal dissolution mechanisms affords founders substantial latitude in tailoring these provisions to their particular circumstances, while the imperative character of judicial dissolution authority ensures that ultimate recourse to public authority remains available regardless of charter provisions. Understanding this framework is essential for founders structuring family foundations, for beneficiaries seeking to protect their interests, and for fiduciaries navigating their obligations when dissolution becomes appropriate.
