| Comparing Corporations | Foundation | “Simple company” | Cooperative company |
|---|---|---|---|
 | |||
| Details | A foundation is a legal person to which assets are irrevocably assigned for the purpose of completing not-for-profit purpose.A foundation can be 'of public utility' when it serves a philantropic, philosophic, religious, scientific, educational, cultural or artistic purpose. The definition of the Company and association code reads as follows (Art. 1:3)"A foundation is a legal person without members, established [1 by a legal act]1 by one or more persons, called founders. Its assets are allocated to the pursuit of a not for profit purpose in the context of the exercise of one or more specific activities which constitute its object. It may not distribute or procure, directly or indirectly, any pecuniary advantage to its founders, directors or any other person, except for the not for profit purpose determined by the articles. Any transaction violating this prohibition is void". | The "simple company" refers to an intuitu personae contract closed between two ore more persons, allowing them to put their contributions in common with the aim of sharing the direct or indirect patrimonial profit which may result of it. It benefits from great contractual freedom, as it can be constituted for a specific duration and/or specific operations (e.g. a commercial transaction, patrimoninal planification,...).
| |
| Details | |||
| Legal Personality | Yes | No | Yes |
| Assets | The foundation has its own assets, but no share capital. | The contract must determine each associate’s participation to the benefits and losses of the company. Where the contract does not specify each associate’s particiption to the benefits and losses, the participation is proportionate to each associate’s contribution.
| Sufficient funds for the company’s projected activities |
| Profit Distribution | No The statutes may provide that, when the not-profit-purpose has been achieved, the founder (his successors) may take back a sum equal to the value of the assets or the assets themselves which the founder has assigned to the achievement of this purpose. | The modalities of the profit distribution are determined in the contract. Allocating all profits to one associate, or excluding an associate from the right to participate to the profit distribution, will render the contract void, unless the contract can be validly requalified. | |
| Duration | Illimited, except provided otherwise in the statutes. | Illimited, unless otherwise agreed by the Parties to the contract. If the company has been incorporated for the execution of a specific operation, the company is deemed to have been incorporated for the time necessary for the execution of that operation. | Illimited except otherwise provided |
| Incorporation Requirement | |||
| Deed | Notary deed | A private contract | Notarial act |
| Seed Funding | There is no fixed minimum assets but they should be sufficient for the projected purpose. The very definition of a foundation traditionnally requires assets to be allocated to the required purpose. | No seed funding is required by law. | Contribution in cash and in kind |
| Minimum number of shareholders | No members or shareholders. Minimum one founder. | Two. | 3 |
| Financial Plan | None | No financial plan is required. It may, however, be advised depending on the social purpose. | YES |
| Securities | |||
| Types | None
| Participation shares (reflective of each associate’s participation to the benefits and losses of the company). | Registered shares |
| Voting Rights | n/a | The associates of a simple company have equal voting rights. | Minimum 3 shares with voting right- One share = one vote, except where otherwise decided |
| Transfers | n/a | Participation shares are not transferable, unless otherwise contractually agreed. | Free between shareholders |
| Liability | |||
| Shareholders | If an associate fails to respect the contract, the contract may be terminated, as long as this termination does not hinder the contract’s existence and purpose for the other associates. | Proportionnate to the contribution | |
| Directors | The managers are liable for the exercice of their mandate. | Joint liability of founding members | |
| Decision Making | |||
| General Meeting | None | All decisions taken by the associates’ General Meeting concerning the company’s affairs or aiming at amending the company’s deed, are taken unanimously. However, the contract may provide that decisions are to be taken through a simple majority, except if the decision aims at modifying the social purpose. | |
| Representation | Representation by the Board, or Board members appointed by the Board | The company is represented by its managers, in the limits of their mandate. If the contract remains silent on the management of the company, the associates are deemed to have authorised each other individuallyto act on behalf of all others. However in this case, associates may chose to distance themselves from such acts before they are taken.
| Collegial or individual or flexible |
| Board | Yes – Minimum 1 member. Directors can be natural or legal persons Powers are exercised collegially if there is more than one Board member. | The company’s affairs are managed by mandated “managers”, who may but must not be associates. Unless the contract defines that these managers must act jointly, they are allowed to act separately in the limits of their specific mandate. As any agent, the manager’s mandate can be revoked at any moment. However, if the managers are appointed through a specific provision of the contract, they can only be dismissed based on just and proper grounds appreciated by a judge, or by unanimous (or majority if so provided) decision of the associates.
| One or more directors |
| Related Topics | |||
| Related Topics | Topics Not Connected. | Related Topics | Topics Not Connected. |
