Individuals seeking an alternative to trusts for wealth management and estate planning purposes turn to foundations. A foundation in The Bahamas is a little bit like a trust and a little bit like a company, but foundations have different advantages that make them attractive to high-net-worth individuals planning their giving.
The Bahamas recognizes a foundation as a legal entity once it is registered here. Like a company, it can sue and be sued, operate indefinitely unless it is wound up or liquidated, and be resident in The Bahamas. Like a trust, a foundation holds property endowed upon it (meaning transferred to it) by a founder or founders. The property is no longer an asset of the founder once it is given to the foundation. See Foundations Act, 2004.
Foundations have creation documents that identify their beneficiaries. A person's will may create a foundation, in which case the person making the will must be the only founder. If the foundation is not created by a will, it must have a charter. Either the will or the charter includes the identities of beneficiaries, the purposes of the foundation, and other details about the foundation's operation and governance. Foundations Act, Section 6. The Bahamas permits foundation beneficiaries that are individuals, charities, or the general public. Foundations need not have charitable purposes, although some do. Other purposes of foundations include the management of assets. Foundations Act, Section 4.
A foundation may have a council and/or officers. The council oversees the foundation and makes sure it complies with applicable laws. If there are no officers, there must be a council, and vice versa. Either the council or officers manage the administrative needs of the foundation. Foundation officers must meet specific requirements such as having capacity, not being a convicted felon, and not being related to members of the foundation's council, unless the foundation specifically consents that the officer may still serve. Foundations Act, Section 10.
If the charter permits it, a founder may revoke a foundation at any time. Foundations also may be wound up or liquidated similarly to companies. Any Bahamian foundation must have assets equal to or greater than B$10,000, US$10,000 or the equivalent in another currency.
To find out more about structures for business ownership, visit Gonsalves-Sabola Chambers online or call the office at +1 242 326 6400.