Foundation Charter and Rules: What Goes Inside

A foundation charter in Mauritius is the document that defines what the foundation is, what it is for and who may benefit from it. For a family, it plays a role comparable to the trust deed, but it belongs to a legal person rather than to a relationship between a settlor and a trustee. This page looks at what the charter contains, what the separate rules or "Articles" can add, and which choices deserve the most care. It assumes you already know the general idea of a foundation; registration and set-up formalities are not covered here.

Charter, Articles and rules: three layers

People often use "foundation constitution", "charter" and "rules" interchangeably. Under the Foundations Act 2012 they are not the same thing.

• The charter is the document filed with the Registrar. It is the foundation's constitution and the part that is, in practice, fixed.
• The Articles are supplementary rules. The council may make them only if the charter allows it, and each council member signs them (section 10).
• Day-to-day working papers, such as council minutes and any non-binding family guidance, sit below both. They cannot override the charter.

A useful rule of thumb: put in the charter what must be hard to change, put in the Articles what the council may need to adjust as the family evolves, and keep personal wishes in a separate non-binding note such as a letter of wishes.

What the charter must state

Section 8 of the Foundations Act 2012 lists the core content of a charter. In substance, it must identify:

• the name of the foundation;
• the founder and an address in Mauritius for notices to the founder;
• the purposes and objects of the foundation;
• the initial assets endowed to it;
• the beneficiary, or the way in which beneficiaries are to be identified.

A foundation acquires legal personality only once it is registered with the Registrar of Companies (who also acts as Registrar of Foundations) and holds a certificate of registration (section 5). Until then, the charter is only a draft. The Act's wording is the minimum; a family charter will usually say a good deal more.

The objects clause

The objects clause is the heart of the document. The Act allows a foundation to pursue charitable or non-charitable objects, for the benefit of a person, a class of persons or a particular purpose (sections 3 and 4). For a family, three drafting styles are common:

1. Named beneficiaries, where the charter lists the people who benefit.
2. A class, such as "the descendants of the founder", which stays valid as children and grandchildren are born.
3. A purpose, such as keeping a family home or a family business together.

A broad clause gives the council flexibility, but also less certainty about what it may and may not do. A narrow clause protects the founder's intentions but may become awkward later. Neither is better in the abstract; the right balance depends on the family and should be tested with an adviser.

Beneficiaries and the founder's position

The charter must say who benefits or how they will be identified. The Act allows the founder to be a beneficiary, and the transfer of a non-citizen founder cannot be set aside under the succession rules of that person's domicile or nationality. Whether this protects a particular family is a separate question: see how foundations interact with forced heirship and the wider discussion of forced heirship and trusts.

The charter is also the place to record how much the founder keeps. A founder who retains many powers may blur the line between the foundation and the founder's own estate. The limits are developed in founder powers.

The council: composition and powers

The council runs the foundation. The charter and the Articles normally describe how members are appointed and removed, how decisions are taken and what requires unanimity or a majority. The Act sets some constraints:

• at least one council member must be ordinarily resident in Mauritius (section 17);
• minors, bankrupts, people convicted of fraud or dishonesty, and officers of the foundation or their close family cannot sit on the council.

Every foundation also needs a secretary, who must be a FSC-licensed corporate service provider (Management Licence) or another Mauritius-resident person authorised by the FSC (section 13). The charter does not usually name the secretary, but it should not conflict with this requirement. A fuller treatment of the body is in the foundation council.

A drafting table: what belongs where

The recurring question is "can the council change this alone?". If the answer should be no, the item belongs in the charter.

Optional clauses worth considering

Beyond the statutory minimum, family charters often address the following.

Guardian or protector-style oversight

Some founders want an independent person who can supervise the council, similar to a protector in a trust. The role is described in guardian of a foundation or trust. If you include it, the charter should say clearly what the guardian may veto, replace or approve, and what happens if the post falls vacant.

Distribution principles

The charter can state general criteria (education, health, housing) without fixing amounts. Details that change often are better left to the Articles or to a non-binding note.

Succession of the founder's role

Decide what happens to the founder's rights on death or incapacity: do they lapse, pass to a named person, or move to the council? Leaving this unsaid is a common source of dispute.

Amendment and winding-up

A clause on how the charter may be amended, and on what happens to the assets if the foundation is dissolved, avoids a gap in the most sensitive scenarios. The Act also provides for a fee on amending a charter; the amount in the 2015 consolidated schedule has since been modified by regulation, so check the current schedule rather than relying on that figure.

Records the foundation must keep

Under sections 36 and 37, a foundation keeps accounts of its receipts, expenditure, distributions, purchases, sales, assets and liabilities. It also keeps, at its office, copies of documents filed with the Registrar (the charter and the Articles), the minutes of council meetings and registers of council members, founders and persons who have endowed the foundation. These records can be inspected by the founder, officers, the Registrar and the FSC.

Since the FIAMLA treats a foundation as a legal person and names the Registrar of Foundations among the relevant authorities, beneficial-ownership transparency obligations also apply. Drafting a charter that assumes complete secrecy would therefore be unrealistic.

Tax and cost points that touch the charter

The charter does not itself create a tax outcome, but its content can affect how a foundation is treated. Under section 49A of the Income Tax Act, a foundation is taxable on its taxable income at the Part IV rate of the First Schedule (15 %), and distributions to a beneficiary are treated as dividends. The former exemption for foundations whose founder and beneficiaries were all non-resident was repealed by the Finance Act 2021, with deemed effect from 1 July 2021. Charitable foundations are listed among exempt bodies in the Second Schedule, Part I. See how foundations are taxed for the detail.

Registry fees are fixed by schedule and by notice, and change from time to time. The 2025 notice of the Corporate and Business Registration Department sets the annual fee for a foundation at Rs 9 000 if paid within the notified period in January 2025, and Rs 13 000 after the deadline. Treat these as historical figures and confirm the current ones.

Charter checklist before signing

• The name, founder and Mauritian notice address are stated correctly
• The objects clause says whether the foundation is for persons, a class or a purpose
• The initial assets are described
• Beneficiaries are named or a clear method of identifying them is given
• The charter says whether the council may make Articles
• The founder's retained rights are listed, and their limits understood
• Council appointment, removal and decision rules are set out
• Any guardian's powers and replacement procedure are defined
• Amendment and winding-up mechanisms are included
• The family has taken advice on forced heirship and tax in their own jurisdictions

Charter or trust deed?

Readers weighing the two structures often ask whether the charter is just a trust deed by another name. The overlap is real: both set purposes, beneficiaries and powers. The difference is the legal person. A foundation holds assets in its own name, while a trustee holds trust assets on behalf of others. The comparison is developed in trust vs foundation, and the corresponding trust document in what a trust deed contains. For the statute behind the foundation itself, see the Foundations Act explained.