Section 15Part 4 — The Operation and Management of Foundation Companies
Limitation on distributions
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A foundation company shall not dispose of any of its assets if, immediately following the date on which the disposition is proposed to be made, it will be unable to pay its debts as they fall due in the ordinary course of business (a “prohibited distribution”).
The recipient of a prohibited distribution is liable to the foundation company for the amount or value of the disposition if, when it was received, the recipient had actual knowledge that the disposition was a prohibited distribution.
If a director or manager of a foundation compa ny knowingly and wilfully authorises or permits a prohibited distribution, the director or manager commit s Section 16 Foundation Companies Act (2025 Revision) an offence and is liable to a maximum fine of fifteen thousand dollars and to imprisonment for five years, or both , and the foundation company commit s an offence and is liable to a maximum fine of fifteen thousand dollars.
For this section, “ dispose ” is defined in section 87 of the Trusts Act (2021 Revision).
Cross References
- Section 87 of Trusts Act
Reference to Trusts Act