NATURE AND PURPOSE OF A FOUNDATION IN BOLIVIA
Unlike commercial companies, foundations do not pursue profits but channel their resources toward altruistic purposes. The assets assigned to them are permanently separated from the founders and used exclusively to fulfill the purpose established in their bylaws. This characteristic means that contributions are made gratuitously, without any expectation of compensation.
Bolivian law requires that their activities must not be of a financial nature and that their operation must have official recognition.
ESSENTIAL REQUIREMENTS FOR INCORPORATING A FOUNDATION
To create a foundation, the following conditions must be met:
- Identification of founders: They may be natural persons or legal entities, the latter acting through a representative.
- Definition of the corporate purpose: A clear and specific purpose of general interest.
- Initial contributions: Assets allocated exclusively to the foundation’s purpose.
- Bylaws: Document regulating administration, use of resources, and internal rules.
- Appointment of directors: Responsible for executing decisions and managing the foundation.
LEGAL PROCEDURE FOR REGISTERING A FOUNDATION
Incorporation may be carried out through a public deed or a will. The subsequent steps are:
- Submission of the application to the competent authority with the foundation charter, bylaws, and regulations.
- Name reservation and verification.
- Legal opinion and notarization of documents at the Government Notary, as ordered by the departmental authority.
- Procedure to obtain legal personality through a resolution issued by the corresponding authority.
If registration is denied, the decision may be challenged before a trial judge, following the legal remedies established by law.
REGULATION, OVERSIGHT, AND DISSOLUTION OF FOUNDATIONS IN BOLIVIA
The bylaws establish the internal governance of the foundation. If there are regulatory gaps, administrators may approve complementary provisions, provided they are notarized. Oversight of foundations is carried out by the Public Prosecutor’s Office to ensure their purpose is fulfilled.
A foundation may be dissolved for the reasons stated in its bylaws, for fulfillment or impossibility of its purpose, for inability to operate according to its internal rules, or by court decision if it engages in activities contrary to public order or good morals. In the event of liquidation, any remaining assets will be distributed as stated in the bylaws, and if no provision exists, they will be allocated to the public university of the district.
In summary, establishing a foundation in Bolivia requires not only fulfilling formal requirements but also implementing an organizational and oversight framework that ensures the continuity of its mission. This includes its creation and recognition, as well as dissolution and liquidation scenarios, all governed by applicable law.
Our law firm provides expert advice on the incorporation and legal management of foundations. If you are seeking professional support to comply with legal requirements, contact us today.
Frequently Asked Questions (FAQs)
Can a foundation have commercial purposes?
No, its resources must be allocated exclusively to altruistic and general interest purposes.
Is initial capital required to establish a foundation?
Yes, the initial assets are essential and must be allocated exclusively to the corporate purpose.
Which authority oversees foundations?
The Public Prosecutor’s Office exercises control and supervision over their operations.
What happens if the authority denies a foundation’s registration?
The denial can be challenged before a trial judge, following the remedies established by law.
What are the causes for dissolving a foundation?
These include the fulfillment or impossibility of its purpose, non-compliance with its bylaws, inability to operate, or a court decision for unlawful activities or those contrary to public order.
The content of this article does not reflect the technical opinion of Rigoberto Paredes & Associates and should not be considered a substitute for legal advice. The information presented herein corresponds to the date of publication and may be outdated at the time of reading. Rigoberto Paredes & Associates assumes no responsibility for keeping the information in this article up to date, as legal regulations may change over time.
