Is it possible to create a charitable foundation during martial law?

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Registration of a charitable foundation in Ukraine
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Now, during the war, our company receives requests for help in establishing and acquiring charitable foundations. But during the times of war many state registers are closed, so it is impossible to register any legal entity.

The Cabinet of Ministers of Ukraine has adopted decree No. 209 - Some questions of state registration during martial law. According to this decree, registration will be carried out only by those state registrars, which will be included in a separate list of state registrars, which will be given access to the Register during martial law. Now registrars have already begun their work, lists are formed, so we can begin their work.

What can be done now?

Today you can join existing charities as a volunteer or by providing any resources.

You can already think about how your charitable foundation will work:

  • what will be the structure of the governing bodies;

  • in what areas and whom you will help;

  • who will do the accounting, because no one will cancel it;

  • how the funds will be credited and subsequently divided between the needs and goals of the fund, etc.

Firstly, you can prepare the necessary documents in advance, and secondly you can prepare a work plan for the fund. And as soon as the Register starts working, your charitable fund will be ready for registration and the start of activities without delay.

Interesting: How to enroll a charity into the fund?

If you are outside of Ukraine

All the more reason to start working on the establishment now. The fact is that each founder of a charity organization will need a notarized power of attorney. Depending on the country where you are, the power of attorney will need to be apostilled or legalized (depends on whether that country is on the list of countries that have joined the Hague Convention). Our lawyers will provide you with a draft of the power of attorney, and will advise you on how to certify the power of attorney.

You can also get a draft of the statutes of the future foundation now. You can either settle on the typical one, or discuss the specifics of your choice.

What can be peculiarities in the activity of a charitable foundation, even if there are foreigners among the founders?

You can find the answer to this question in the previous materials:

Peculiarities of registering a charitable foundation in Ukraine with foreigners as founders

Charity and taxes in Ukraine: peculiarities of accounting of the welfare fund

Governing body: one-person or collegial? What are the other options?

A sole executive body. As a rule, it is called a director. Sometimes - the president or the head of the foundation. The sole executive body is often the best option if the founders are not more than 5-6 people, and unambiguously the best option if the founder is alone. It is often the case that the founder and the head are the same person.

Collegial management body. As a rule, it is the board of directors, headed by the head of the board. It is the chairman who represents the foundation in relations with government agencies and other institutions, but key decisions are made collegially. It makes sense to appoint the board only when there are many founders and later participants of the fund. For example, up to ten or more people, and if they have concerns about accumulation of powers in one hand. It is the latter argument that is more weighty.

Is it possible to elect both the board and the president? Does it make sense and in what cases?

There must be only one executive body. But there can be, for example, an advisory body. There are no key powers as such, but there is a nice office and some honorary functions. And also, the advisory body has no responsibility, either.

This way goes when there is a specific relationship between the founders/participants, like a political game. This is neither good nor bad. The main thing is that everyone is happy and everyone is "in business. In practice, there are a lot of "actors", decisions are made according to established procedures, and therefore it is longer than in organizations where the structure is simpler. But the main advantage is the safety net against the accumulation of power in one hand and unbalanced decisions and actions.

Does it make sense to create a supervisory board if there are less than 10 members?

According to Article 19 of the Law of Ukraine "On charity activities and charitable organizations", if the charity foundation has less than ten members, you do not have to create a supervisory board. But this is a right, not an obligation. Sometimes, a supervisory board is nevertheless created.

According to the aforementioned law, the supervisory board has supervisory and regulatory functions. Moreover, the supervisory board has even more powers than the executive body. For example, it can terminate the powers of any member of the executive body until the general meeting makes a final decision on it.

How will the registration of the welfare fund take place under martial law?

Here we are talking about the moment when the list of registrars will be formed and they will be given access to the UGR.

  • Full extraterritoriality. According to this decree, state registration will be possible regardless of the location of the legal entity.

  • Without administrative fees. 

  • Submission in electronic form. The documents for the creation of the Annuity Fund can be submitted by e-mail or "by other means of communication". But attention: documents in electronic form must be created in accordance with the requirements of electronic document management. That is, using an electronic signature.

  • If there is no electronic signature and it is difficult to find a notary to certify a power of attorney or other documents, you can sign them directly when submitting to the state registrar. But in this case, of course, you have to come in person. But if you are abroad, you can issue a power of attorney with the right to sign on your behalf.

Before the registration you should have the documents for the registration of the foundation, taking into account the peculiarities of the future activities of your foundation, and the nuances of its structure (for example, if one of the participants will be a foreign person). But it is desirable to have a clear understanding of how such a foundation will work in Ukraine in today's reality.

If you are planning to register a charitable foundation - we support you. Seek professional legal assistance from our specialists. This is the direction in which our company has been working in Ukraine for more than 15 years.

Any questions left?

All about registration and work of the charitable foundations in Ukraine here.

Publication date: 17/03/2022
Marina Losenko

About author

Name: Marina Losenko

Position: Associate

Education: National Aviation University

Knowledge of languages: Russian, Ukrainian

Email: [email protected]

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Marina Losenko
Kuzava Vlasta
Junior lawyer
Ivanna Stefanchyshena
Assistant of the Lawyer