A Foundation is a separate legal entity, which consists of a Council, a Guardian, and Beneficiaries.
It comes into existence when an individual or other legal entity (known as the Founder) transfers the legal ownership of assets – which may be of almost any type – to it, and it is formally registered.
The drafting of the constitution of the Foundation requires considerable care when considering tax issues.
Lutea’s primary activity is to draft, provide Council and administer Foundations. Lutea’s administration services include the following:
- Maintenance of Council minutes.
- Regular monitoring of assets.
- Maintenance of accounting records.
- Production of annual accounts.
- Optionally, production of accounts or asset summaries on a quarterly basis, usually 1 month after the quarter end.
- Preparation of Tax returns (for UK only).
- Provision of relevant information to a Founder or Beneficiary or his or her adviser for taxation purposes.
- Regular meetings with the Founder or Principal Beneficiaries.
Lutea charges for its administration services on a time basis and not by reference to the value of the fund.
It prefers wherever possible to agree in writing a fixed fee with the Founder or Principal Beneficiaries for its annual administration charge, which it levies annually in advance on 1 January each year.
Because changes in investment policy or unforeseen occurrences may arise from time to time which incur greater time costs than anticipated, Lutea will reserve the right to charge a higher fee if the time costs should exceed the fixed fee.
This will usually be done after discussion with the principal.