Foundations

The audit and advice on foundations includes charitable foundations and family foundations/trusts.

Non-profit foundations enable the founder, in addition to perpetuating his personality, to permanently promote one or more social causes and thus the common good. In the case of charitable foundations, a large number of questions arise, which concern, for example, the demarcation of the idealistic area from the areas of economic business operations, special-purpose operations and asset management.

One example is the determination of the results of the individual areas. This is done against the background that sustained losses in the economic business area can lead to the loss of non-profit status. Other problem areas are: the timely use of funds, the optimal investment of assets for the sustainable fulfilment of the foundation’s purpose, etc.

We advise potential founders on the establishment of charitable foundations or on endowments to existing foundations and can, if necessary, take over their administration and provide foundation directors.

Family foundations serve to preserve family assets over several generations. A family foundation exists if the essence of the foundation, according to the articles of association and, if applicable, the foundation transaction, is to enable the family members to use the foundation assets and to collect the foundation income. Due to the introduction of the inheritance substitute tax pursuant to § 1 para. 1 no. 4 ErbStG for domestic family foundations and the addition of the proportionate assets or income pursuant to § 15 AStG for foreign family foundations, the endowment of family foundations is only worth considering after careful consideration of all advantages and disadvantages. Particularly worthy of mention is the preferential tax treatment for foreign family foundations set out in § 15 para. 6 et seq. AStG for family foundations with management or domicile in the EU or the EEA.

LOHR + COMPANY GmbH advises charitable foundations and domestic and foreign family foundations in Germany, Austria and Liechtenstein and their founders.