Foundations in the Czech Republic: Yesterday, Today and Tomorrow

Abstract

The contribution is focused on the historical development and also on contemporary issues and trends in the field of foundation law in the Czech Republic. The foundation sector is affected by the fact that shortly after it was ‘rediscovered’ at the beginning of the 1990s, it was abused due to an insufficient and incomplete legal regulation. The strict and mandatory nature of the Act on Foundations and Endowment Funds (1997) was a logical reaction and an attempt to introduce some order to this area. A significant difference between the Czech legal regulation and the conception in other countries was the limitation of the foundations’ purposes exclusively to public benefit, detailed regulation for asset management and the ban on entrepreneurial activities performed by foundations (except for statutory exceptions). However, the situation in the society has changed in the last years, and a partial liberalisation of the foundation law in the Czech Republic appears as suitable and socially acceptable. The New Civil Code (in force from 7th January 2014) can be considered – as regards its provisions concerning foundation law – as a step in the right direction since it could contribute towards the emancipation of the institute of foundation, a greater flexibility and perhaps even an increase in the number of foundations in the Czech Republic.