Charter of an NGO in Ukraine. Comments of a lawyer
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NGO's charter is a legal act of codified rules which regulate activity of NGO, relations with other organizations and citizens, its rights and obligations in different spheres. This is the whole complex of rules which is adopted by NGO. The main task of it is organization and regulation of NGO activity in an efficient way. A content must comply with laws which regulate NGO activity.
Existence of a charter is an obligation for NGO of all types with a status of legal entity according to the Law of Ukraine "On non-governmental association". If NGO is established without a status then it is not an obligation. A charter must be approved by an establishers' meeting. Keep in mind that there must be not less than two establishers.
Requirements for NGO charter
Article 11 of the Law of Ukraine "On non-governmental association" defines the main requirements for a charter. According to this article it must have:
- name and an abbreviated name (if applicable) of NGO. NGO's name is consisted of two parts - a general one and a proper one. The general part of name must be type of NGO (a non-governmental organization and a non-governmental unity);
- targets and directions of NGO activity. NGO is established and acted for defeating rights and interests, satisfaction social interests (economical, cultural, ecological and other interests). According to the Law of Ukraine "On association of citizens" NGOs could act only for realization of targets and for defeating interests of their members;
- procedure of entering and leaving into a NGO, rights and obligations its members. The charter must define a members' age, body which accepts members and list of reasons when a member can leave organization willingly or can be excluded;
- powers of management and a head of NGO, procedure of their forming and replacament, term of their authority and also procedure of defining and replacement a person who is authorized to act on NGO's behalf;
- periodicity of meetings and procedure of adopting decisions by NGO management, a procedure of adopting decisions via communication tools;
- procedure of management's reporting to NGO's members. Permanent manager bodies report to higher manager body. Periodicity and form of reporting must be defined in a charter;
- procedure of appeal management's decisions. As a rule, this matter related to higher manager body or to Audit Commission;
- sources of incomes and procedure of using it and other NGO's property;
- procedure of establishment, activity and liquidation of NGO charters (in a case if NGO with a status of legal entity establish them). It is an obligation to note which manager body has this power and which bodies are estalished there (their powers, periodicity of meetings etc);
- procedure of putting changes into a charter;
- procedure of adopting decisions on reorganization or voluntary liquidation, decisions on using money and property after voluntary liquidation (for NGO with a status of legal entity).
There are also may be additional articles about procedures of NGO establishment, activity and voluntary liquidation according to the law.
It is not obligation to put articles about all-Ukrainian status of NGO into a charter.
NGO charter without a status of legal entity mustn't have articles which required in positions 5-8 p.1 article 11 of of the Law of Ukraine "On non-governmental association" (if it is approved in a decision about NGO establishment).
Comparing the Law of Ukraine "On non-governmental association" to the law of Ukraine "On association of citizens", we need to admit that the new law expands a list of requirements to a content of charters: 1) to define periodicity of meetings and procedure of adopting decisions by NGO's management, including adopting decisions via communication tools; 2) a procedure of management's reporting to members; 3) a procedure of appealing management's decisions, actions and procedure of examination. These changes allow NGO to has a quorum without a real presence during management's meetings if it is defined in a charter. The important matter is related to changes about the procedure of defeating members from actions of NGO's management. Because legislation in force doesn't define procedure of defeating.
There is also simplification in the procedure of changing NGO address. You don’t have to note any addresses or even city where your NGO is located. That’s why it is not an obligation to inform about change of NGO’s office.
You can download a NGO’s charter via the link.
Articles of a charter and non-profit status
In general NGOs are non-profit. That’s why there are requirements for them into Tax Code of Ukraine. Article 133.4.1. defines such demands for this:
- charter must have a prohibition to divide profits among members, NGO’s workers, establishers, management and related to NGO persons;
- charter must have an article about transferring NGO’s property to one or more similar non-profit organizations or transferring property to a state budget in a case of liquidation (merger of organizations, division of organizations, affiliation or reformation of organizations). It means that if a non-profit organization decides to stop its activities then it must be an article in a charter about transferring all NGO’s property to similar non-profit organizations. NGO also has a right to transfer property to a state budget. This article had been regulated by Tax Code previously but list of cases when NGOs can transfer their property was expanded after putting changes into the Code. Now it is not only liquidation but also merger of organizations, division of organizations, affiliation or reformation of organizations.
There is another significant article of Tax Code. Non-profit organizations must use all their profits only for realization of NGOs’ targets. NGOs should pay attention to articles of charters about targets, goals and tasks of activity and examine if they are correspond to NGOs’ sources.
Previous article 157 divided profits into two types which are taxed and not taxed. According to this article NGOs’ charters must have a full list of such types of activities which are non-profitable according to the laws. This article is excluded and there is no such a requirement.
In conclusion we can say that charter should be written carefully according to the laws if you don’t want any problems during registration procedure and activity of NGO.
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