Institution of private law

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An Institution (Establishment) private law in the Principality of Liechtenstein as a separate legal form for a company known.

It is a legally independent and organized company, dedicated to permanent economic or other purposes, entered in the commercial register as an establishment register, which has a stock of material, at most personal resources and does not have public law character or has another form of association person.

Basic manifestations of the establishment in Liechtenstein

The Liechtenstein legal system recognizes four basic types of independent institutions (in the narrower sense):

• the establishment under public law (Art 78 para 4 LV)

• the public institution (Art 534 Paragraph 2 PGR ),

• the public utility (Art 577 ff PGR) and

• the establishment under private law (Art 534 Paragraph 1 PGR).

The institution under private law is largely regulated in Liechtenstein in Liechtenstein personal and company law ( PGR ).

Basis of reception

The institution under private law was developed and implemented in Liechtenstein on the basis of various historical bases. The most important templates were

Systematic classification

The Liechtenstein establishment under private law is an entity standing between the corporation and the foundation , with or without legal personality .

The private-law institution under Liechtenstein law can also have members (not just users).

Differentiation of the manifestations in practice

In practice, the various options for designing the institution are rarely used. As a rule, according to the purpose of the establishment:

  • Establishments that operate a commercial business.
  • Institutions that do not operate a commercial business,
    • Family institutions,
    • non-profit institutions,

distinguished.

Typical institution

In Liechtenstein, an establishment typical of traffic is understood to mean the legal form of the establishment in which:

  • no members,
  • there is no capital broken down into shares and
  • the founder continues to have a dominant influence on the establishment in which he
    • can determine the administration of the institution,
    • can determine who is the beneficiary and how much is allocated to him,
    • can even be the most beneficial,
    • continues to have the right to dissolve the institution.

The private law institution typical of traffic is thus a one-person company. The founder controls directly or indirectly all organs of the establishment or exercises all organ functions in person.

Often the "establishment without founding rights" (also: "establishment without founding rights" or "establishment organized under foundation law") can be found, in which the administrative board of the establishment has the powers of the highest body (founder). A temporary intermediate form is the "establishment with dying founder's rights". In the case of the "establishment with dying founder's rights", the founder's rights expire at a predetermined point in time (usually with the death of the establishment's founder).

construction

Legal personality

The independent private-law institution acquires legal capacity through entry in the Liechtenstein commercial register . According to Art 579 PGR, the private-law establishment must be equipped with sufficient endowment capital (endowment fund, establishment or dedication fund). Throughout Art 579 f PGR, there is talk of assets that are directly monetary or bonds (minimum CHF 30,000).

Purpose of the institution under private law

Every economic and non-economic purpose is suitable (abstract openness to purpose).

The establishment can be set up for any specific, reasonable and possible purpose that is not unlawful, immoral or dangerous to the state, in particular for the investment of assets, distribution of earnings, consolidation of companies by transferring shares in trust or for acquisition , for family care, non-profit, charitable, other personal, impersonal or similar purposes (Art 932a § 3 Abs. 1 PGR).

organization

The establishment statute must regulate the legal relationship between the participants or between individual groups of participants by creating an organization and regulate the rights and obligations of these organized participants, such as joint assertion of rights against the establishment or other participants or the like (Art 545 PGR; Art 932a Section 41 (1) PGR).

The establishment statute can be drawn up by the founder or a third party and must be drawn up as a special document (Art 932a § 9 Paragraph 1 PGR).

Structure and foundation

According to Art. 535 Para. 1 and 3 PGR, an institution under private law can have one or more

  • Individual (s),
  • Companies,
  • Community,
  • Community associations,
  • Association person not entered in the commercial register

to be founded. If the establishment is founded in trust, a distinction is made between a legal and an economic founder. The founder vis-à-vis the commercial register is always the legal founder (the fiduciary trustee ). As a rule, the economic founder (who contributes the establishment's assets) does not have to be disclosed to the commercial register. Unless assigned (assignment, Art 541 PGR), the founder's rights are only available to the legal founder.

organs

Both natural persons and legal persons can be appointed as organs of the private law establishment (Art 111 Para 1 PGR). The founder can hand over his rights in the private law establishment to the administration, so that after the establishment only the administration can remain as the highest body (Art 182 Abs 1 PGR). Any citizen of a member state of the European Economic Area can be an organ of the private law institution without restriction.

Legal status of the founder

According to Art. 543, Paragraph 1 of the PGR, the supreme body of the private-law establishment is the (legal) founder, as long as the latter does not transfer the tasks to the administration of the establishment or to other persons (Art. 549 PGR) (e.g. the economic founder). In the case of an establishment under private law, the founder, as the highest body, is only an optional body (Art 543 Paragraph 1 in conjunction with Art 541 PGR), which can but does not have to exist.

The economic founder is given the opportunity to influence the establishment through a mandate contract or by assigning the founder's rights.

Founder's Rights

According to Art 541 PGR

  • assigned,
  • transfer,
  • inherited,

no but

  • pledged or
  • otherwise burdened

become.

The founder or third parties named by the establishment's statutes can at any time change the statutes and in particular the purpose, subject to the rights of the creditors, such as increasing or reducing the establishment fund, changing the organization and the like (Art 549 PGR).

An institution without founding rights is also possible (foundation-like institution). Founder's rights are therefore not a mandatory feature of the establishment itself.

Shareholders

In addition to the founder's shares, after the establishment of the establishment, shares in the establishment can be issued to third parties. These are neither founders nor beneficiaries, unless this is expressly provided for in the establishment statute.

Institution administration

The establishment administration can be carried out by the founder himself, by third parties but also by the beneficiaries (regardless of whether they are entitled to benefit or not).

Beneficiaries

The beneficiaries are the persons named in the institution's statutes. As long as third parties have not been appointed as beneficiaries (contemplated persons, beneficiaries), there is a legal presumption that the owner of the founder's rights is himself a beneficiary (Art 545 Paragraph 1 bis PGR).

In the case of family establishments, the founder can stipulate in the statutes that the third, specifically designated consignor may not be deprived of the establishment benefits accruing to them free of charge by their creditors by way of foreclosure or bankruptcy against them; this is to be noted in the entry in the commercial register (Art 546 para. 1 PGR).

The rights of the beneficiaries are also based on the regulations of the trust company . The beneficiaries can also be members of the institution's administration or the control body. The rights and obligations of the beneficiaries are determined by the reference in Art 551 Para. 1 PGR to Art 932a Section 98 PGR, generally according to the law or the institutional statute, if necessary according to the content of the securities issued via the beneficiary and additionally according to the regulations on trusteeships in General (Art 932a § 94 Abs. 1 PGR).

Expansion of the group of beneficiaries

The beneficiaries do not have to be named in the establishment's statutes, but can be individualized.

The establishment privilege can arise with or without consideration, such as purchase monies, current contributions or the like in accordance with the establishment statute with or without the issue of securities on the beneficiary, provided that the establishment statute does not have a charitable or similar purpose with beneficiaries that are not determined in advance or with impersonal purposes Provides benefits or the like (Art 932a § 80 Paragraph 1 PGR).

Transfer of beneficiary rights

The beneficiary's rights are fully or partially transferable and inheritable , resilient and attachable , unless this is excluded in the establishment statute or a highly personal right exists (Art 932a § 122 para. 1 PGR).

Obligation to provide information

Upon request, each beneficiary is to be given cheap information about all facts and circumstances, in particular about the status and investment of the (institutional) assets, to submit reports and invoices at appropriate time intervals and to explain why they are actually Have not received or have not achieved assets, including income , which they would have received or should or could have obtained after the ordinary course of things or according to other circumstances (Art 932a § 68 Para. 1 and 69 Para. 1 PGR).

This legally stipulated obligation to provide information is optional. The establishment statute can provide for a different regulation in this regard. A further restriction can be found in Art. 932a § 68 Para. 1 PGR to the extent that the beneficiaries, including the beneficiaries, are only given information insofar as their rights are concerned .

Control body

The statutes of the establishment can provide for an auditor to be set up. If the establishment carries out a commercial business, an auditor must be appointed (Art 932a § 43 Paragraph 1 PGR and Art 192 Paragraph 8, 195 PGR).

In any case, an annual list of assets must be compiled (Art 932a § 34 Paragraph 1 PGR).

At sight

In the case of establishments under private law that do not carry out a commercial operation, the founder (owner of the founder's rights), or universal successor or executor of the owner of the founder's rights, can appoint a supervisory body from the commercial register (Art 932a § 154 Paragraph 1 PGR).

In principle, the supervisory body has the rights and obligations that the Office of Justice orders when it is appointed or afterwards, but at least those that the supervisory board has at the stock corporation and its members also have the position of additional founders (Art 932a Section 156 (1) PGR ).

company

The name of the registered institution under private law can also be an imaginary name. It is the name under which the establishment is entered in the commercial register, the establishment is operated and signed (Art 1011 PGR).

The institution private law the term must necessarily: Institute lead, with foreign names are allowed (for example: establishment ).

References to other provisions in the PGR

The provisions on trust companies with personality also apply to the provisions of the Liechtenstein establishment under private law.

The regulations on the supervision, conversion and dissolution of the Liechtenstein foundation and for family establishments without members the regulations on family foundations may apply in addition to institutions without members serving exclusively charitable purposes .

Further references in Art. 548 para. 2, 550 para. 2 PGR to the cooperative, the general provisions in the PGR (for example Art 166 ff, 170 para. 1, 245 para. 1 PGR).

liability

Institution

In principle, only the institution's assets are liable for the institution's liabilities to third parties (Art 548 (1) PGR). As a rule, there is no personal liability of those involved or a statutory obligation to make additional contributions (Art 932a, Section 36, Paragraph 1 of the PGR). As with the cooperative, there may be limited liability or an obligation to make additional contributions. This limited liability or obligation to make additional payments can neither be waived nor deferred for the founder with effect in the bankruptcy of the establishment (Art. 548 (2) PGR). This obligation of limited liability or the obligation to make additional contributions can also be assumed by third parties instead of members or in the absence of such members (Art 548 Para. 3 PGR).

Extension of liability

The establishment statute can stipulate that the other assets not contained in the company or in any other way, to which the company itself belongs, are also liable for its liabilities (Art 932a § 37 Paragraph 1 PGR).

Limitation of Liability

In the establishment statute, an establishment under private law without commercial operation and without exercising any other trade may include the provision to be registered in the establishment register for the purpose of entry, stating that after establishment, private liabilities valid for the company, apart from claims from unlawful acts, only with the consent of a special body or the next candidate or third party can be entered into, or that a private creditor may seek satisfaction only from the assets not belonging to the endowment fund or only from the earnings or neither from the establishment assets nor from the earnings as long as the establishment is not terminated (Art 932a Section 38 (1) PGR). Further restrictions are possible (Art 932a § 38 Paragraph 2 ff PGR).

founder

Unless otherwise stipulated in the establishment statute and subject to unauthorized acts or special agreements, several founders are not jointly and severally liable as such for their obligations under private law as a result of the establishment of the establishment (Art 932a § 24 Paragraph 1 and 142 ff PGR).

Liability to the institution

According to the rulings of the Supreme Court, there is no right of trace (deviation from Art 932a § 30 Paragraph 1 PGR).

Third Party Liability

The bodies of the establishment authorized to represent the outside world are liable to a third party in good faith whom they have harmed by deliberate deception under the condition that they pretend:

  • that a liability or obligation to make additional contributions contrary to the establishment statute or establishment assets or
  • greater than the actual institutional assets
  • or similar,

unrestricted and in solidarity, subject to their right of recourse against the establishment or other persons, insofar as they are enriched or have otherwise benefited (Art 932a § 36 Paragraph 2 PGR).

For unauthorized acts and omissions that bodies of the establishment under private law authorized to represent outside the company have committed in the exercise of their representative activities, they are liable in addition to the establishment, otherwise with corresponding application of the relevant regulations for association persons, unlimited and solidarity (Art 932a § 36 Abs. 4 PGR) .

Beneficiary Accountability

If co-beneficiaries have caused an institution body to abuse its rights or obligations or if they have consented to such abuse, they are solely liable up to the amount of their beneficiary rights, in addition to that, together with other wrongdoers, the other claimants are liable for the damage incurred (Art 932a § 145 Paragraph 1 PGR) .

Responsibility of third parties as de facto institutional bodies

If the establishment is acting against a third party (including representatives, employees , other auxiliary persons and the like of the establishment) with intentional deception,

  • he is authorized to do so as an organ of the establishment, or
  • otherwise interferes in the management without authorization, or
  • he receives institutional assets in the prescribed capacity as an organ of the institution or in knowledge of a breach of faith committed by another in an inadmissible manner, or
  • otherwise unlawfully or in a manner contrary to good faith, he takes advantage of the institution's assets, or
  • in other cases, the third party helps an organ to knowingly commit a breach of faithfulness,

so he is liable to the bodies authorized to represent the outside world and is obliged to provide information to them (Art 932a § 146 PGR).

termination

The termination (dissolution and extinction) of a trust company occurs regularly due to (Art 932a § 17 PGR):

  • Bankruptcy due to insolvency or over-indebtedness ,
  • Annulment proceedings because of unlawfulness, immorality or state dangerousness of the purpose or state dangerous activity,
  • Destructibility proceedings due to significant deficiencies in the establishment statute;
  • voluntary liquidation ,
  • Timing , and
  • according to the rules established for the dissolution of a foundation .

The extent to which the dissolution of an association, company or company that is the founder or owner of an establishment results in its dissolution is to be assessed by the judge on a case-by-case basis, taking into account all the circumstances (Art 550 para. 1 PGR).

The institution under private law can be dissolved at any time on the basis of a resolution of the supreme body. With the decision to liquidate the supreme body, the liquidator (s) is / are appointed to take over the further processing. The founder can also be the institution's liquidator himself.

Advantages of the private law institution

The private law institution as a legal person generally has the following advantages over other legal forms:

  1. very flexible structuring of the internal organization possible (the only mandatory body is the board of directors),
  2. the share capital can also be divided into shares,
  3. Necessary share capital of CHF 30,000 (approx.EUR 20,000) is relatively low,
  4. It is also possible to structure a foundation law if the founder waives the founder's rights and transfers them to the administrative body,
  5. the extensive anonymity of the people behind the institution is guaranteed.
  6. the establishment ( founder's rights ) as a legal form can easily be transferred from one person to another,
  7. tax advantages (no coupon tax ).

The private-law institution under Liechtenstein law is so flexible that it B. can be structured as a corporate body but also similar to a foundation. An exact classification in a certain scheme is difficult because of this flexibility.

Not least because of this special flexibility, which can lead to the dissolution of the boundary between the establishment and the foundation or the corporate association persons, the establishment under private law is very popular and also widespread in legal transactions in Liechtenstein. The Liechtenstein establishment under private law is therefore unique in Europe in this form and flexibility as a legal person.

development

The development of the number of establishments includes all establishments in Liechtenstein entered in the commercial register and is negative. The data was taken from the publication of the commercial register in Liechtenstein , as published annually in the annual report. Information as of December 31 of each year. No reliable figures exist before 2007, only estimates. In the period from December 31, 2007 to January 1, 2017, around 8,200 private-law institutions were deleted from the register (-55%). If this development continues, as in the years 2007 to 2016 with around 900 deletions per year, there will no longer be any institutions under private law in Liechtenstein by 2025 at the latest. While it took about 70 years to build up to a high of 14,841 private-law institutions, the reduction to a level in the 1930s would be achieved in just 18 years if the tendencies towards deletions persist.

Development of the number of institutions in Liechtenstein
14841
14578
13835
12721
11486
10535
9423
8424
7540
6636
6031
5673
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Note : The figures in the current statement of accounts are inconsistent from December 31st of each year to January 1st of the following year and are obviously corrected in each subsequent government statement of accounts . These figures for the current year are therefore only provisional. On the basis of a small inquiry from MP Harry Quaderer in October 2012, government councilor Aurelia Frick informed us that the "ongoing post-processing of old tabs (...) legal entities are being continuously entered or removed from the commercial register database". "These changes in the number of holdings are not listed as" new establishment "or" deletion ", as the process did not take place in the current year. As a result, the number of stocks as at 31.12. not with the number from 1.1. of the following year matches ".

For detailed overall statistics for all types of companies in Liechtenstein: see Commercial Register (Liechtenstein) .

literature

  • Conrad Elster, Lexis and Loening (Hrsg.): Concise dictionary of constitutional law . tape 3 . Gustav Fischer Verlag, Jena 1911.
  • Otto von Gierke : The essence of human associations . 1902th edition. Scientific book club.
  • Katja Heuterkes: Organizational units with legal capacity in the administrative structure of France, Germany and the European Communities . Lit Verlag, Münster 1998.
  • Graziella Moroccan: The Liechtenstein private law institution with special consideration of the founder's rights, writings on banking law . tape 22 . Vaduz 1994.
  • Otto C. Meier: The Liechtenstein private law institution . Zurich 1970.
  • Hans Michael Riemer: Bern Commentary on Swiss Private Law . Stämpfli AG, Bern 1993.
  • Gaby Tamm: The Liechtenstein private law institution in the event of the death of the founder with special consideration of German-Liechtenstein legal relationships . The Other Publishing House, 2003.
  • Nikolaus Voigt: Independent public law institutions and independent public law foundations of the Principality of Liechtenstein . 1st edition. Ex jure publishing house, Vaduz 1976.

Web links

Sources and References

  1. ↑ Until January 31, 2013 referred to as the public register .
  2. ↑ See Art 534 Paragraph 1 and 2 PGR .
  3. ^ Constitution of the Principality of Liechtenstein of October 5, 1921 (LV), LGBl No. 15 of October 24, 1921.
  4. ↑ These are to be entered in the commercial register in accordance with Art. 538 (1) PGR and various information must be published.
  5. ↑ For these, the announcement of the entry in the commercial register within the meaning of Art 538 Paragraph 1a in conjunction with 957 Paragraph 1 No. 2 PGR.
  6. ↑ There is no definition of this in the PGR. These are institutions that exist mainly for the benefit of one or a few families or their members.
  7. ↑ If a business is operated in a commercial manner or if this can be carried out in accordance with the statutes, an auditor must exist that is separate from the founder.
  8. ↑ In the case of this institution sub-form, the founder specifies in the statutes of the board of directors how they are to exercise their office. The founder can also bind the board of directors to future instructions from him by means of a mandate contract.
  9. ↑ Art 535 Para. 2 PGR: Municipalities and municipal associations require * government approval to be established.
  10. ↑ See decision of the EFTA Court of Justice in the Herbert Rainford-Towning case, E-3/98.
  11. ↑ In contrast to this, a foundation is an asset dedication with legal personality that is administered by specially appointed bodies. The founder of the (private) foundation is usually no longer an active element.
  12. ↑ For the possibility of pledging and encumbrance see also Antonius Opilio : Antonius Opilio: Liechtensteinisches Sachrecht . 1st edition. 2: Art 265 to Art 571 . Edition Europa Verlag, Dornbirn 2010, ISBN 978-3-901924-25-5 , p. II-316 ff . (with further evidence, legal status: January 2010).
  13. ↑ The exact legal status is not regulated in the PGR, but left to the regulation in the establishment statute.
  14. ↑ Art 932 § 94 Abs. 4 PGR.
  15. ↑ Who is or is not a beneficiary is primarily based on Art 932a § 78 ff PGR. In this regard, Liechtenstein takes a restrictive approach (see for example: OGH in 4 Cg 2001. 429-29, p. 67).
  16. ^ Until January 31, 2013: Public Register Office.
  17. ↑ Art 551 para 1 PGR.
  18. ↑ See commercial register .
  19. ↑ OGH on the foundation in LES 2004, 224 ff, as beneficiaries have a claim for damages against organs and therefore the right to trace evidence is not necessary.
  20. ↑ Source: Annual reports 2005 to 2019 online.
  21. ↑ The information for 2007/2008 is uncertain and probably an extrapolation.
  22. ↑ MINUTES OF THE PUBLIC LAND DAY MEETING OF 24./25. OCTOBER 2012, PART 1, approved in the state parliament session on December 19, 2012, accessed on January 25, 2013 at: landtag.li
  23. ↑ MINUTES OF THE PUBLIC LAND DAY MEETING OF 24./25. OCTOBER 2012, PART 2, approved in the state parliament session on December 19, 2012, accessed on January 25, 2013 at: landtag.li