A foundation is a legal entity in its own right with its own assets and liabilities. The legal concept of the foundation was originally developed from capital being set aside for a special non-profit or charitable purpose, used by religious and welfare groups. The foundation is still frequently used for religious and non-profit organizations. Distributions to incorporators or to those, who constitute its corporate bodies, are not allowed and its distributions are furthermore restricted by law to distributions with a charitable or social purpose.
The foregoing does not mean that the use of a common foundation is restricted to charitable purposes. It can be and is extensively used in structures in which the foundation is the legal owner of assets of which others hold the economic/beneficial ownership.
The principal difference between a foundation and other legal entities, is that a foundation has neither shareholders, nor members, nor a capital divided into shares. The board of managing directors of a foundation (bestuur), which manages its affairs, is therefore not subject to the overall control of shareholders (or members). The initial board is appointed at the moment of incorporation. Thereafter, vacancies are filled at the sole discretion of the board in office or by another person or body especially directed to do so in the articles of association.
Formation of a foundation
A foundation is established by notarial deed executed before a civil law notary in Aruba. The deed of incorporation of a foundation must include its articles of association, in which it is required to state the name of the foundation, including the word foundation or a translation thereof (stichting), its purpose and the manner in which board members are appointed and dismissed. The board should procure that the foundation is registered at the Chamber of Commerce
Assets of a foundation
Unlike a company, a foundation has no capital per se, since it has no shares or shareholders. The founder of a foundation can contribute to the foundation the initial assets at the time of establishment of the foundation or on any date afterwards.
Management of a foundation
A board, consisting of one or more managing directors, manages and acts on behalf of the foundation. The powers of the board are set out in the articles of association of the foundation.