Founder revocation right: declaration, effect and winding up

Section 34 PSG ties revocation to a reservation in the foundation declaration. No revocation right arises later merely because the founder changes their mind. The clause must therefore be found in the effective foundation declaration. An intention at formation, an internal note or later correspondence does not replace the reservation.

Only a natural person as founder may reserve this personal right. A legal entity cannot reserve it. Where there are several founders, the formation documents, exact wording and rules on exercise must be read together. Whether one founder may act alone or all founders must act jointly depends on these legal foundations.

The revocation reservation must be distinguished from an amendment reservation. Amendment develops the foundation declaration further. Revocation leads into the statutory dissolution route. Each right needs its own basis and the two must not be merged in one resolution.

The declaration must be attributable to the specific founder and show the intention to revoke the private foundation. The foundation declaration may impose additional requirements concerning form, recipient or evidence. Before making the declaration, the complete foundation declaration, all amendments and the rules for several founders should therefore be reviewed.

The declaration itself, its date, the acting person and receipt by the foundation belong in one evidentiary record. A draft, announcement or internal instruction does not reliably establish a completed revocation. If capacity, identity, receipt or the wording is disputed, those issues require separate clarification.

The Austrian Supreme Court emphasises objective interpretation of reserved founder rights. In 6 Ob 106/03m of 11 September 2003, the content of the deed must therefore be read in its overall context. Later expectations cannot freely enlarge a missing or narrower reservation.

A permissible revocation is a ground for dissolution under section 35(2) PSG. When the foundation board receives a valid revocation from the entitled founder, it must unanimously resolve to dissolve. The resolution does not replace the revocation. It is the next corporate step in the dissolution procedure.

The external legal effect also requires attention to registration. Under section 35(5) PSG, dissolution based on a unanimous board resolution becomes effective upon entry in the commercial register. The declaration, authority, resolution and filing must consequently fit together. The board remains responsible for orderly winding up.

The foundation continues during winding up. Revocation therefore does not create an immediate claim to individual bank balances, securities, real estate or shareholdings. The statutory winding-up steps and creditor protection must come first.

Section 36 PSG governs distribution after dissolution. Following dissolution by revocation, section 36(4) PSG generally makes the founder the ultimate beneficiary unless the foundation declaration provides otherwise. This must be established from the actual deed. Several ultimate beneficiaries and substitute provisions can alter the distribution.

Creditors must be protected before transfer. Section 36(2) PSG refers to section 213 AktG. This includes the public notice to creditors, review of known claims and the statutory waiting period. Known, not yet due or disputed liabilities must be discharged, deposited or adequately secured.

The winding up may involve different types of assets. Real estate requires review of the land register, encumbrances, leases and transfer form. Business shareholdings raise questions under the articles, consent requirements and valuation. Securities, receivables and tangible assets each require their own evidence and transfer steps.

Revocation is therefore not a right to retrieve individual assets. It opens the dissolution and winding-up route. The article on dissolution of an Austrian private foundation explains creditor review, distribution and deletion from the commercial register in more detail.

The preliminary review requires the current foundation declaration, all amendment deeds, the supplementary foundation deed and a current commercial register extract. Where there are several founders, the original formation documents, later agreements and rules on joint exercise should be placed in the same file.

The draft or completed revocation declaration, delivery and receipt records, board resolutions, asset schedules, contracts, known liabilities and the ultimate beneficiary provision should also be secured. Each document answers a different question. The foundation declaration proves the reservation, the register extract shows the registered position and the receipt record addresses delivery of the declaration.

The file should distinguish effective deeds from working material. This makes it possible to see whether the dispute concerns the existence of the right, its exercise, the board resolution or the later transfer of assets.