1. Foundation as a Process

Having presented what he describes as the `anatomy' of corporate institutions, Hauriou turned to a consideration of the juridical aspects of their `physiology', i.e. their `life': birth, existence and death.

Considering the birth of an institution, Hauriou characterised it as a juridical `process of foundation' (Hauriou, 1925: 116). Indeed, given his usage of the term `foundation', perhaps it is even redundant to speak of a `process' of foundation, since for Hauriou, foundation in itself is a process. In any event, the idea of foundation as a process seems to be the core of his conception.

Although he did not deny a certain contractual element in the process of foundation, he would have regarded as reductionist any view which sought to explain the whole process of foundation in terms of a simple contract.

2. Two Kinds of Processes: Formal Versus Customary

Looking in more detail at the birth process of institutions, Hauriou discerned two categories of foundation:

(1) Customary foundations, which he merely mentions, and which presumably arise out of the growth of custom, and

(2) Formal foundations, which as the name indicates arise out of a more directed and planned process, which he goes on to describe in detail.

Following his example, we also will concentrate on formal foundation process.

3. Two Modes of Foundation: Isolated Versus Common Will

Hauriou made a further distinction between two modes of formal foundation:

(1) Foundation by the isolated will of an individual, which produces establishments, such as hospitals, hospices, etc., and

(2) Foundation by the common will of several individuals, which results in corporations or universitates, in which there is a permanent group of members perpetuating the foundation.

Once again Hauriou restricted his analysis to the second type, i.e. formal foundations by common will, and we will also restrict our consideration to these common will foundations.

4. Common Will Foundation Processes

Hauriou distinguished four elements in the process of foundation by common will:

(1) The manifestation of common will with the intention of founding;

(2) The preparation of founding articles;

(3) The de facto organisation of the corporate institution;

(4) The recognition of its juridical personality.

Hauriou regarded the `manifestation of common will' as `by far the most important element', and he accordingly concentrated his analysis on this aspect. This manifestation of common will provides the `consensus' element which forms the juridical basis of the foundation process. This consensus is based on the common will known to the `founders', whose manifestations of communion `form an aggregate of consents'.

However, the foundation process depends on more than just a communion of wills. By providing the `earth' in which the directing idea of the institution is planted by the will of the founders, the`milieu' in which the idea of the institution is born also plays a critical role in the process of foundation.

Moreover, the formation of the aggregate of consents, said Hauriou, also takes place thanks to three factors:

(1) Unity in the object of the consents, which is assured by the `idea of the work', which in a sense invites unity by `the force of attraction of the object'.

(2) The action of a power also plays an important role in the formation of the aggregate of consent. By `power' Hauriou means `political power' in the sense of deliberations by a general assembly, for example, whose decisions have a juridical value by unifying the consent of the assembly to the proposal of the founders.

(3) The bond of a procedure which provides the `exterior formal element' which enables the founding process to `acquire the unity of a juridical act'. These procedures involves such things as the purchase of stock in a company, or perhaps the obtaining of a membership card for a group.

Thus Hauriou saw foundation as a `subjective process' with corporate institutions being `born in a crisis of communion among the founding wills' during which the idea of the work passes into the subjective state in the minds of the adherents.

Based on these observations about the way in which institutions are born, Hauriou concluded that the process of foundation is an eminently `juridical process', whose character depends in no way on the intervention of the state.


The theory of the institution, Extracted from Stefan Gigacz, Law's Third Dimensions: International Associations and NGOs in the Global Legal Order, memoire presented for "Master's Course in Legal Theory", European Academy of Legal Theory, Katholieke Universiteit Brussel - Facultés Universités Saint-Louis, Bruxelles, 1996, 172p.