Transfer of Founder's Rights
Transfer of the Founder's Rights of an Establishment by Means of a Blank Assignment Deed – New Case Law
The Liechtenstein “Anstalt” (establishment) is a legal form unique to Liechtenstein that offers considerable flexibility with respect to its organisation. It may – depending on the founder’s wishes – be structured similarly to a single-member company, a foundation or a corporation.
The most common type of Liechtenstein establishment is an entity owned and managed by a single person, the holder of the “founder’s rights”. The holder of the founder’s rights constitutes the establishment’s supreme governing body and, as such, is accorded comprehensive powers.
Article 541 PGR provides that founder's rights may be assigned, inherited or otherwise transferred at any time. The assignment of founder’s rights is not subject to any particular formal requirements. It is, however, common practice in Liechtenstein to assign founder’s rights by way of a blank assignment deed, which does not identify the assignee.
In a recent decision (04.09.2020, 03 CG.2020.45, LES 2020, 239) the Supreme Court dealt with the legal validity of such a transfer of founder's rights and held, in accordance with its previous case law, that the transfer of founder's rights by way of a blank assignment deed is only valid either if the assignment deed is handed over to the assignee or, alternatively, the assignee is granted the opportunity to access that deed at any time.
The Supreme Court has expressly emphasized that in the event that the blank assignment deed is not physically handed over to the acquirer, i.e. the new holder of the founder's rights, but remains with the assignor or with a third party (such as a trust services provider on a fiduciary basis), the acquirer must be granted both the legal and the actual possibility of taking possession of the blank assignment deed and demanding its handover and that this possibility must be guaranteed at all times in order for the transfer of the founder’s rights to be valid.
In the case at hand, the applicant claimed to have acquired the founder's rights of an establishment several years previously. However, the blank assignment deed was never physically handed over to him and it was unclear where the deed was located and in whose actual possession it was at the time of the alleged transfer of the founder's rights. For this reason, the applicant's opportunity to access the deed at any time was deemed to be lacking, which led the Supreme Court to deny the transfer of the founder's rights claimed by the applicant.