Legal Alert – Report Regarding the New Finnish Foundations Act
The Ministry of Justice set up a working group on 5 January 2012 to draft a proposal for the new Foundations Act. The working group’s report regarding the new Foundations Act was submitted to the Minister of Justice on 15 May 2013. The report contains proposals for the new Foundations Act, Implementing Act and Foundations Decree as well as the rationale and detailed rationale.
The aim of the proposal was to clarify the distinction between permitted and prohibited activities of foundations, to establish an effective framework for the development of the administration and operations of a foundation, and to create better means to conduct the internal and external monitoring of foundations. The key proposals for amendments seek, among others, to further specify the broad concept of a related party and the concept of permitted and prohibited related-party transactions, to increase business freedom, to specify the regulation of administration, and to increase the disclosure requirements for foundations.
The proposal is currently under consultation until mid-July. The target is to present the Government proposal to Parliament for the new Foundations Act in the spring term 2014 and that the new Foundations Act would enter into force in the beginning of 2015.
The starting point of the proposal is that the majority of the proposals for amendments could be utilised also by existing foundations in the organisation and development of their administration and operations. The proposal for the Implementing Act would impose an obligation on some of the foundations to amend their by-laws within the three-year transition period.
Oili Kela of Attorneys at Law Borenius Ltd acts as the secretary of the Foundations Act working group.