Before establishing a foundation, of course it’s good to know what a foundation is, including its organs and duties. Yes, as a legal entity that focuses on achieving in the social, religious and humanitarian fields, and does not have members, the foundation still has organs within it. Keep in mind that the foundation’s organs consist of trustees, administrators, and supervisors. Each of these organs has its own duties and authorities. This is intended so that they can carry out their functions properly in order to achieve the aims and objectives of the foundation. Well, to better understand it, let’s look at the explanation of the foundation’s organs and each of their duties below!
What is a Foundation?
Before discussing further about the organs of the foundation and their duties, Friend KH needs to first understand what a foundation is. Based on Law No 28/2004 on the Amendment to Law No 16/2001 on Foundations (Foundation Law), a foundation is a legal entity consisting of assets that are separated and intended to achieve certain goals in the social, religious and humanitarian fields that do not have members. Yes, like a legal entity, a foundation has certain assets that are separate from the assets of its founder. The wealth is in the form of assets obtained from the founder’s initial capital that has been separated and included in the foundation’s assets. The purpose of separation is to make it clear that the initial wealth of the foundation is no longer part of the founder’s personal or joint assets. However, although both are legal entities, foundations are not the same as Limited Liability Companies (PT). The nature of the foundation is not solely profit-seeking (non-profit). This is because basically the purpose of establishing a foundation includes three things that have been mentioned in the Law, namely social, religious, and humanitarian. In its structural implementation, the foundation has three important organs consisting of trustees, administrators, and supervisors. These three organs must exist and may not hold concurrent positions between each position in a foundation.
Pembina
Based on Article 28 of the Foundation Law, the board of trustees is an organ of the foundation that has authority that is not delegated to the management or supervisors by this law or the articles of association. People who can be appointed as members of the board of trustees are individuals as founders of the foundation and / or those who based on the decision of the meeting are considered to have high dedication to achieve the goals and objectives of the foundation. Members of the board of trustees may not concurrently serve as members of the management and/or members of the supervisory board to avoid the possibility of overlapping authorities, duties, and responsibilities that may harm the foundation or other parties. Based on their position, the duties and authority of the trustees include:
- Decisions regarding amendments to the articles of association;
- Appointment and dismissal of board members and supervisory members;
- Determination of the foundation’s general policy based on the articles of association;
- Ratification of the annual work program and draft budget;
- Determination of the decision regarding the merger or dissolution of the foundation.
Manager
The second organ of the foundation is the management. Based on Article 31 of the Foundation Law, the board is an organ of the foundation that carries out the management of the foundation, where they are individuals who are capable and able to perform legal acts. The prohibition of concurrent positions as members of the board of trustees and supervisory members also applies to the foundation’s management. The appointment of the board is done by the trustees based on the results of the trustees’ meeting. The period of time since the appointment of the board is five years and can be reappointed in accordance with the rules of the foundation’s articles of association. The composition of the board consists of at least a chairman, a secretary, and a treasurer. In principle, they are responsible for the management of the foundation or for the interests and objectives of the foundation, and are entitled to represent the foundation both inside and outside the court.
Supervisor
The last organ of the foundation is the supervisor. As the name suggests, the supervisor is the organ of the foundation in charge of supervising and advising the management in carrying out the foundation’s activities. The appointment of supervisors is done for a five-year term and can be reappointed for one term. If during the term of office the supervisor commits an error or negligence that causes the foundation to go bankrupt and the wealth of the foundation is not sufficient to cover the loss, then each member of the supervisor is responsible for the loss. In their position, supervisors also have the authority to dismiss members of the management temporarily by stating the reasons and must report the dismissal in writing to the trustees.
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That is the explanation of the duties and authority of the foundation organs, namely the trustees, administrators and supervisors. Hopefully this information can be useful for running the foundation that KH Friend established, yes!
KH Contact
Are you interested in establishing a foundation but still confused about the roles and duties of the foundation’s organs? Not to mention taking care of the establishment and legality documents of the foundation itself? Leave it to Kontrak Hukum! For only Rp5 million, we can help you take care of the foundation establishment including the required legality documents, such as deed, NIB, OSS, and NPWP in just a matter of hours! For booking information, visit this page. If you want a free consultation regarding the establishment of a foundation, you can also contact us at Tanya KH or via Direct Message (DM) to Instagram @kontrakhukum.
