A foundation is a legal entity in its own right with its own assets and liabilities. The legal concept of the foundation was developed from capital being set aside for a special non-profit or charitable purpose and was originally used by religious and welfare groups. The foundation is still frequently used for religious and non-profit organizations but also for estate planning. Distributions to incorporators or to those, who constitute its 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 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 (mainly the chairman of the board as sole representative of the foundation) hold the economic ownership.
The principal difference between a foundation and a corporation is that a foundation has neither members nor shareholders, nor a capital divided into shares. The board of a foundation, which manages its affairs, is therefore not subject to the overall control of shareholders or members. The initial management board is appointed at the moment of incorporation. Thereafter, vacancies are filled at the sole discretion of the management board in office or by another person or body especially nominated for that purpose.
A foundation is established by notarial deed executed before a civil law notary in Suriname. The articles of incorporation of a foundation must include the name of the foundation, including the word ‘foundation’ or a translation thereof, its purpose, the first management board and the manner how managing directors are appointed and dismissed, the seat of the foundation and the designation of the balance after liquidation in the event of dissolution of the foundation or the manner in which the designation shall be determined.
Unlike a limited liability 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.
A management board, consisting of one or more managing directors, manages a foundation. The powers of the management board are set out in the articles of association of the foundation. A foundation may also have a supervisory board which supervises the board in accordance with the articles of association and managing directors reporting to the Board. The founder of a foundation and members of the management board and the supervisory board cannot participate in the assets and/or profits of a foundation.