The Law n. º 150/2015, of 10 September, which came into effect on October 10 th, made some significant changes in the Foundations legal regime established in the corresponding Framework Law and also amended the legal entities regime that was set out in the Civil Code.

Regarding the main changes operated in the Foundations Framework Law, we have to highlight the implementation, by the legislator, of a simplified recognition procedure, under which the final decision must be taken within a maximum of 30 days from the date of submission of the recognition application by the foundation, instead of the 90 days deadline that applies to the normal recognition procedure.

In order for the applicant to be able to gain access to this simplified recognition procedure, the foundation must respect the following cumulative conditions: (i) the foundation must be created exclusively by private law persons and may not be established as a Private Social Solidarity Institution (IPSS) or pursue the typical goals of the cooperatio n foundations for development or of the foundations established for the creation of a higher education institution; (ii) the initial endowment must be made solely in cash; and (iii) the text of the foundation’s statutes must follow a template approved in a dvance by order of the member of the Government responsible for the foundations.

Besides this innovation, the requirements to which the foundations are subject regarding transparency were mitigated and, as a result of that, they are no longer required to permanently present on their website, an up-to-date list of the members of their corporate bodies and the start and end dates of their term. On the other hand, foundations with an annual income below 2 million euros are dismissed from having to present on their website copies of the founding and recognition acts, the management and accounting reports, information regarding the number of workers and the nature of their contract relationship, the external audit report and the assessments made by the superviso ry body over the last three years.

Moreover, regarding the public foundations and the private foundations officially recognized as being of benefit to the public, the legislator clarified the rules that govern the limits of their own expenses, establishing that, for the purposes of ascertaining the category of their activity, if the spending amounts are the same, the foundation must be submitted to the most favorable legal regime. The breach of the referred rules during two years implies that the foundation loses its status of being of benefit to the public.

Finally, some changes were made regarding a few legislative definitions, namely the promotion of the assistance and care of refugees and migrants to an activity/purpose of social interest, and also the exclusion of the payments received by the foundations as compensations, fulfillment of contractual obligations or as European funds, from the concept of financial support.

Regarding the changes that were made in the Civil Code, these were mostly made in the general legal regime applicable to all legal entities, and in the rules that specially regulate the foundations. With reference to the first matter, the legislator determined that if, when the legal entity is extinguished, exist any assets that were do nated to the latter, inherited with a certain liability or that are allocated to a specific purpose, the Court must, upon request of the Prosecutor’s Office, any interested party, liquidators or of the donor’s heir, attribute those assets to another legal entity, maintaining their previous liability or allocation.

As to the general assets that belonged to a legal entity that was extinguished, they must follow the destination established in the statutes or in a resolution approved by the competent corporate body. However, it is also possible for the liquidators, the Prosecutor’s Office or any other interested party, to request to the Court the attribution of those assets to another legal entity, or to the State, ensuring, as much as possible, the same purpos es of the extinguished legal entity.

Finally, regarding the rules that specially regulate the foundations, it is established that its act of institution, its statutes and corresponding amendments, can only produce legal effects towards a third party after being publicized in the same manner as established for the commercial companies. At last, the publication in an official journal of the decision to recognize the foundation, or its refusal, it is no longer made at the expenses of the foundations that apply for recognition.