Isle of Man Foundation
Founder can retain ‘control’ over the Foundation’s assets
Isle of Man Foundation
Registering a Foundation in the Isle of Man
The Isle of Man, situated in the centre of the British Isles, is an internally self-governing dependent territory of the British Crown which is not and never has been part of the IOM. It is however, part of the British Isles. Tynwald, the Island’s 1,000 year old Parliament, makes its own laws and oversees all internal administration, fiscal and social policies. External issues, such as foreign representation and defense, are administered on the Island’s behalf by the IOM Government and the Island makes an annual payment for these services.
A Foundation in the Isle of Man:
- has a separate legal personality, like a company
- has no shareholdership
- holds assets in its own name
- can contract with third parties including finance transactions
- can sue in its own right
- can be charitable or non-charitable
International estate planning
If the application meets the requirements of the Act, the Registrar must establish a foundation. Should the Registrar decline to register a foundation, application may be made to the High Court to appeal the decision of the Registrar.
On approving the application, the Registrar must make the following entries in the Register of Foundations (‘the Register’):
– name and address of the foundation;
– its objects;
– names and residential addresses of the council members;
– name and address of the registered agent;
– registration number.
+ Foundation Instrument
The foundation instrument is the major constitutional document of a foundation (sometimes called, in other jurisdictions, the charter). It must comply with the terms of the Act and must be completed in English. The foundation instrument is a public document.
The name of the foundation must comply with the ‘Guidance Notes – choosing your company or business name’ issued by the Registrar in respect of bodies corporate and unincorporated that are registered in the Isle of Man. The name of a foundation must end with the word ‘foundation’.
The objects for which the foundation is established must be set out in the foundation instrument. These must be certain, reasonable and possible, not unlawful or contrary to public policy or immoral. The foundation’s objects may include ‘mixed’ objects that benefit a person or class of persons, carry out a specific purpose or do both.
The names of the persons that are beneficiaries under a foundation need not be named in the foundation instrument – they must however be determined in accordance with the foundation rules. Where a foundation has been established for a specified purpose, the foundation instrument need only provide that the foundation is to hold assets in accordance with the foundation rules for that purpose.
The foundation instrument must also specify the names and residential addresses of the members of the council of the foundation. Any subsequent changes to the council members or their details must be notified to the Registrar within one month of the change occurring.
The details of the registered agent must also be included in the foundation instrument.
+ IOM Foundation Rules
The foundation rules (‘the rules’) may be written in a language other than English. Where this is the case, a translation of the rules must be provided to the registered agent. The rules are not publically available.
Where the foundation is for the benefit of a person or class of persons, the rules may provide how the persons, or class of persons, may be changed.
The rules must establish a council to administer the foundation’s assets and carry out its objects. The details of administrative matters relating to the foundation council must be contained in the rules. Matters that must be considered include the appointment, retirement, etc. of council members, the manner in which decisions are to be made, including decisions those decisions (if any) that require the approval of any other person. The rules must identify any person empowered to approve a decision.
The functions of the council and the extent to which they may or must be delegated or exercised in conjunction with another person must be set out in the rules.
The registered agent is an essential element. No foundation may exist without a registered agent. The rules must make provision for the appointment, retirement, removal and remuneration of the registered agent. The High Court has the power to appoint a registered agent should this prove necessary.
Advantages of an Isle of Man Foundations
The Foundation’s separate legal personality means all liabilities remain corporate liabilities of the Foundation and do not attach to Foundation members. This limitation of liability:
Capacity of an Isle of Man Foundation
A foundation may not engage in commercial trading which is not incidental to the attainment of its objects. It does, however, have the capacity to exercise all the rights, powers and privileges of an individual. The capacity of the foundation is not limited by anything in the rules or the act of any person appointed under the rules.
Why not contact Atrium company formation specialists today to speak to one of our advisors on private foundation start-up in Isle of Man?
These experts will guide you towards the correct package for you and your foundation’s needs. We are a highly reputable, reliable company incorporation service provider. Atrium are specialists in guiding clients through the process, from documentation required to submit an application, to post formation considerations.
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