Changed sport federation’s structure and charter
In September of 2016, our law firm was contacted by a Client, a large Ukrainian Sports Federation, that needed legal services that would insure its compliance with the requirements of the Resolution of the Cabinet of Ministers of Ukraine №440 in regard to obtainment of a new non-profit code.
Our services involved not just changing of charter and filing of documents with the tax authorities but also registration of newly elected governing bodies, and, later on, amendment of the charter of an NGO in the section of the structure of governing bodies and their powers.
In the course of subsequent consultations, which are an integral part of legal services in our company, the Client found out that in addition to the improvements indicated by him, it was also necessary to comply with the requirements of the legislation regarding local representation established for all-Ukrainian NGO’s. In other words, it was necessary to register local separate units in most regions of Ukraine. Other necessary improvements to the charter were stipulated in the provisions governing membership in the federation, as well as the organization of meetings of the Conference of the organization.
It was decided to divide such a complex work into several stages. First of all, the company's lawyers prepared a full package of documents for registering changes in the personal composition of the governing bodies. The registration authority makes rather stringent requirements for making decisions by the highest governing body of an NGO, which, moreover, change quite often. At the time of registration of these changes, the rule was in force regarding the need to submit the package of documents, consisting not only of the minutes of the conference itself, but also the register of participants, as well as the minutes of the governing body that initiated the meeting of the conference and the register of participants. It was also mandatory to submit applications from persons included in the governing bodies, who were not present at the meeting of the Conference.
Thanks to the careful preparation of documents and continued consultations with the registration authority, it was possible to register changes in the personal composition of the management bodies within the shortest possible time, that is, within three days.
However, the bulk of the work was yet to be completed. The Client asked for full legal support for the upcoming Federation Conference, at which it was supposed to amend the charter in the following sections:
- change of authority of governing bodies;
- compliance with the requirements of the Tax Code regarding the activities of non-profit organizations;
- finalization of the provisions on membership in the organization, the procedure for its acquisition and deprivation, the rights and obligations of members;
- interaction with local sports federations;
- the procedure for the nomination and approval of delegates to the Federation Conference and others.
Our lawyers legally supported the meeting of the Federation Council, at which a decision was made on convening an extraordinary conference, its date, venue and agenda. We undertook the preparation of all the minutes, registers and other documents, supporting the meeting, took part in it, answering questions from the members of the Management Board regarding the need and nature of the planned changes to the charter.
In accordance with the decision of the Board of the NGO, we prepared a draft of the new edition of the charter of the sports federation within 3 days and submitted it to the members of the Board for review. Later on, for more than a month, our lawyers worked out the recommendations of the members of the Federation Board, representatives of local sports federations.
A number of issues, such as supplementing the charter with provisions in accordance with the requirements of the Tax Code, were only technical. Other issues before their regulation in the charter went through a discussion stage involving our lawyers as legal advisers.
So one of these provisions was the distribution of powers between the two main officials of the NGO - the President and the Secretary-General. Our lawyers explained that in the first place, it was necessary to determine who of their nominated officials would be the head of the organization, that is, would be entered into the unified state register as the head. This circumstance was key in the further distribution of powers in the charter, since the rights and obligations of the head of a legal entity are regulated by law.
In practice, completely incomprehensible to NGO’s is the requirement of the need to register separate units. The fact is that for all-Ukrainian NGO’s, the law requires registration of their separate divisions in most regions of Ukraine, and data on such divisions must be entered into a single state register. Otherwise, the Ministry of Justice of Ukraine has the right to deprive an NGO of its all-Ukrainian status. At the same time, the activities of such units are not sufficiently regulated by the legislation, and in this connection, in most cases, there is a need to develop a regulation on separate units. We are categorically opposed to the regulation of the activities of units in the charter and insist on the creation of a separate provision since in this case further improvements to the law will not lead to the need to change the charter of an NGO.
A lot of questions were connected with the order of interaction between the All-Ukrainian and local sports federations, the mutual recognition of members, the fulfillment of the functions of organizing local competitions, the delimitation of powers with separate units of the federation. The lawyers of our company explained the difference between the local cells, which operated until 2013, and separate units, spoke about the practice of their interaction in other public organizations. Based on the information he had received, the Client developed its own procedure for organizing this work, which was fully consistent with current legislation, general practice and the specifics of the work of a particular NGO.
We notice that in most large NGO’s, in particular, sports federations, when determining the procedure for the selection and approval of delegates to participate in the highest governing body - the Conference, they are limited to general wording. Sometimes even so general that it is only about the fact that the Conference consists of delegates, without specifying who sends them and how that is done. This situation potentially creates risks of recognizing such Conferences as illegal, and decisions made at them as invalid. Therefore, our lawyers always work with the Clients on these provisions of the charter and develop a convenient and clearly regulated procedure for the work of the supreme governing body of an NGO.
After carrying out the above work, we fully supported the organization and holding of an extraordinary Client Conference, answered questions from regular members, delegated to participate in it, took upon ourselves the preparation of documents, such as minutes, a register, and others.
Later on, our lawyers registered a new revision of the charter of the NGO, registered 14 separate units, and, on the basis of the new revision of the charter, received a new non-profit code.