Amendments to the Foundations Act are approved
July 28, 2021
The National Assembly has voted to approve amendments to the Foundations Act.
Minister Naadir Hassan presented the amendments late yesterday afternoon to the House for debate and approval.
The main objective of the amendments is to allow for better supervision of the Foundations by the Financial Services Authority (FSA).
The amendments will ensure that FSA has better access to information in regards to these Foundations.
To note, a Foundation in this context is one which is a ‘hybrid’ entity, which is neither a company not a ‘Trust’.
It allows an individual known as a ‘founder’ to transfer his/her assets into a Foundation, which will benefit his/her beneficiaries. These assets are completely owned by the Foundation and not the properties of the ‘founder’.
Under the amendments, all information on the Foundation should be kept for a minimum period of 7 years (Section 30A), and all financial records are kept at least bi-annually where the entity is registered (Section 75).
Sections 101,102 and 103 have also been amended. These sections deal with the process to re-register a Foundation which has been dissolved.
The penalties for any offence under the law have gone up and there will be a revision in fees also.
The bill makes provision for a transitional period before the approved new amendments come into effect.