Amendment Of The Framework Law Of Foundations
|Author:||Ms Patrícia Dias Mendes and José Francisco Veiga|
Three years after its approval, the Framework Law of Foundations (Law 24/2012 - "FLF") has been amended by Law 150/2015, which will come into force on 10 October. There are a few amendments to detail which, nevertheless, result in a clearer definition of certain notions by the legislature, and there are other amendments that have introduced some noteworthy changes.
Important changes have been made to the legislative definitions of "financial support" and "income". The former definition remains very broad, but its scope has been reduced. In general terms, benefits, indemnities, compensation, provisions, assignments and payments are no longer deemed to be financial support granted by the State. This change is easily understandable because, in these situations, we are not strictly looking at financial assistance or advantages for the foundations. The definition of "income" has also been amended and now includes the contributions that the founders make to the foundations' endowment funds.
The legislature has also decided to relax the previous requirements for transparency of foundations (article 9 of the FLF). As a result, Portuguese foundations and foreign foundations that carry on their activity in Portugal are no longer required to make an up-to-date list of the members of their corporate bodies and the start and end dates of their respective terms of office permanently available on their website. Besides this (in light of Ministerial Order 75/2013), foundations with annual income below 2 million continue to be exempt from submitting their accounts to an external audit and are no longer required to provide certain information on their websites. This information includes (i) copies of the founding and recognition acts, (ii) the identification of the founders, (iii) the up-to-date membership of the corporate bodies and the start and end dates of their respective terms of office, (iv) the management and accounting reports and opinions of the supervisory body for the last three years, and (v) the external audit report.
A further important change is the clarification given to the rules on the limits on own expenditure for private foundations officially recognised as being of benefit to the public (fundações privadas com utilidade pública) and for public foundations. Under article 10(2) of...
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