Proposal to modernise the Danish Foundations Act and enhance supervision
The Danish Ministry of Justice has published the Foundations Committee’s report with recommendations for a comprehensive reform of the Danish General Foundations Act. The proposal focuses on non-commercial foundations, which manage important assets, distribute significant charitable grants and are key actors in Danish civil society.
The aim is to bring the legal framework up to date, ensure greater transparency, and strengthen public trust.
Key elements of the proposal include:
- Establishment of a central foundation register: A national Danish register of non-commercial foundations is proposed to ensure greater transparency and to strengthen the supervision and control of non-commercial foundations, which will help prevent money laundering and terrorist financing.
- Comprehensive revision of governance rules: The Committee recommends a thorough overhaul of the rules governing the management of foundations to cater for more clarity on management duties and liabilities. This includes new rules on board responsibilities.
- Eased access to amendments and restructuring: The current strict rules for changing the articles of a non-commercial foundation, dissolving foundations, or approving mergers are proposed to be relaxed, allowing for greater flexibility when justified by the foundation’s best interest.
- New complaints board: The proposal introduces the right to appeal decisions made under the Danish Foundations Act to an independent complaints board, improving legal certainty and procedural fairness for foundations.
If implemented, the Danish non-commercial foundations should prepare for major changes in the regulatory landscape, which will bring greater flexibility, more up-to-date regulation, but also greater supervision. Existing governance structures, internal procedures and reporting systems of the governed foundations may need to be adjusted to comply with the proposed legislative changes.
Plesner's Partner, Lars Bunch, has been a key member of the Foundations Committee throughout its four-year working period and has been deeply involved in drafting the proposed rules, which will now be subject to a public consultation process.
With his in-depth knowledge of the legislative proposal and its practical implications, Lars Bunch and Plesner's Corporate Law team are well-positioned to assist clients with any questions or legal advice related to the proposed reform – from strategic considerations to specific governance or compliance considerations.
Read the Danish Ministry of Justice's press release (in Danish)
Read the Foundations Committee’s recommendations in full (in Danish)