Provided complex support during formation of an NGO in the form of union

In the summer of 2017, our company was contacted by the Clienty, a large NGO, which was facing the need to reorganize from the current organizational form to a more suitable one - a union.

One of the first to be analyzed  was the question of the possibility of reorganization from a public organization into a public union directly. Our lawyers explained that although this procedure was not directly prescribed in the law, practice knows successful cases of such reorganization. However, in our opinion, the reorganization of a public organization into a union is justified only if there is significant property on the books of the organization, the transfer of which is not a way of legal succession, will entail significant financial losses in paying taxes. In all other cases, it is faster and cheaper to register a new public union.

Our lawyers took part in a detailed consultation of the representatives of the Client on the rights and obligations of the founders of the public union, on developing the best option for organizing membership and the structure of governing bodies.

In the course of the seemingly standard procedure for registering a public union,  resolving complex legal conflicts came into the picture. So, during this procedure, it turned out that the head of one of the founding organizations resigned prematurely and refused to continue working in the organization, and signing the necessary documents. Our lawyers had to take a close look at the charter and convince the justice authorities to change the chief executive of this public organization without his participation in the meeting of the Board and holding a report-and-election Conference of all members of the organization.

Later, after the constituent assembly of the public union was held, it turned out that the head of one of the participating organizations, despite the fact that during the meeting he had voted “yes” on all issues on the agenda and participated in the approval of the charter of the union, refused to sign any documents. There were no problems with the minutes of the constituent assembly, since according to the law it can be signed by the chairman and secretary of the meeting, whereas it was not so simple with the charter.

In accordance with the provisions of paragraph 9 of Art. 15 of the Law of Ukraine governing the creation of legal entities, the charter of a public organization during initial registration definitely cannot be signed by the chairman and secretary of the meeting. In the remaining part, the wording of the law is also written out quite clearly and the judicial authorities, as a general rule, require the signing of the charter of the public union by all founders, which in our case was impossible.

A careful analysis of this rule showed that the constituent document can be signed by a person authorized by the founder. The justice authorities believe that the authority in this case should be confirmed exclusively by a power of attorney signed by the head of the founder's legal entity. In our case, this was also impossible.Thanks to many years of experience in the area of registration of public organizations, our lawyers were able to convince the registration authority that the power of attorney is not the only option prescribed by law and offered an option that was feasible for the Client and acceptable for the justice authorities.

Thus, despite the difficulties encountered during the implementation of the project, the registration of the public union was successfully completed.

Providing legal services, the lawyers of our company turn their focus toward achieving the end result. Whatever difficulties arise during the course of work, we are always looking for ways to achieve the goal. And almost always we find them, because we take our professional pride in this!

Publication date: 20/07/2018

About author

Name: Volodymyr Gurlov

Position: Partner

Education: National Academy of the Security Service of Ukraine

Knowledge of languages: Russian, Ukrainian, English

Email: [email protected]

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