NGO Charter: Structure and Key Elements

In our previous materials, we've discussed when it's advisable to establish an NGO  and emphasized the importance of the founding assembly in its creation. In this document, we'll delve into the subject of a public organization's charter. The activities of NGOs, along with the creation and formulation of founding documents, are governed by the "Law on Public Associations." Article 11 of this law outlines the mandatory provisions that must be included in the organization's charter. These provisions encompass:

1) Name. Several requirements pertain to the organization's name, including:

• It comprises two components: a general and a specific name. The general name denotes the organizational and legal form of the public association (e.g., "public organization").

• It must be written in the official state language. However, a public association may also choose to present its name, in addition to the official language, in a foreign language or the language of a national minority.

• It must not duplicate the name of an existing association.

• Apart from the requirements above, there exist various prohibitions and limitations. For instance, it is prohibited to incorporate the names of government bodies into the organization's name, and consent is obligatory for using someone else's name, including the name of a public figure, among other restrictions.

2) Objectives and Directions of NGO Activities. Article 1 of the "Law on Public Associations" defines NGOs as voluntary associations of individuals formed to exercise and protect rights and freedoms, and satisfy the public, including economic, social, cultural, environmental, and other interests. Thus, this is its fundamental purpose. However, in the founding documents, the objective can be further detailed and elaborated.

3) Procedure for Joining and Terminating Membership in the Organization. The law stipulates that membership is voluntary, and any person can withdraw from the organization's membership at any time. However, the procedure for acquiring membership is not prescribed by law. Typically, an application is submitted to the organization's leader. Membership is obtained either after the leader reviews and approves the application or after such a decision is made at a general assembly, depending on what is specified in the charter. It's also important to note that the charter can provide for regular membership and associate membership.

Associate members are individuals with advisory voting rights, but the key word here is advisory. In other words, they have the right to attend meetings and express their informed opinions, but whether their input is taken into account or not is determined by those who have full voting rights (non-advisory). The votes of associate members may not be counted (unless, of course, the charter specifies otherwise).

4) Rights and Obligations of Organization Members. The right of all members (participants) of the public association to have unrestricted access to information about its activities, including decisions made by the public association, and the measures taken, is recognized. It is also the responsibility of the public association to ensure such access.

5) Powers of the Governing Bodies of the Public Association, the Procedure for Their Election and Re-election. It is understood that the governing bodies are elected by the general assembly of the organization's members. However, details such as the term of their office, the required quorum for decision-making, and other pertinent matters must be specified in the organization's charter.

6) Frequency of Meetings of the Governing Bodies and the Procedure for Making Decisions (Including through Communication Means). The frequency of meetings is generally straightforward. However, the use of communication means is a relatively new consideration that must be explicitly addressed in the charter. Without this provision, the organization may encounter registration issues, potentially jeopardizing its existence. The legislation does not prescribe the frequency of meetings.

7) Reporting Procedure of the Governing Bodies to the Organization's Members. Typically, this reporting takes place at regular general meetings of the organization's members.

8) Procedure for Appealing Decisions and Actions (or Inactions) of the Organization's Governing Bodies. If the governing body is a single entity and there is no supervisory board, the process is straightforward – complaints are reviewed by the general assembly. However, if there is a complex structure of governing bodies, including a collective governing body, separate administrative bodies, and possibly a supervisory board, then the process of addressing complaints becomes more intricate, and determining which body will handle the appeals requires careful consideration.

9) Sources of Income and Their Utilization. It is essential to exercise caution, especially when dealing with financial resources, as a nonprofit organization should ideally operate without generating profit. This means that all funds received should be allocated towards fulfilling the organization's statutory goals and tasks, rather than being distributed among members and governing bodies. Of course, administrative expenses such as payroll may be provided for, but if you intend to maintain nonprofit status, it is crucial to draft the charter correctly from the outset and include all necessary provisions that prohibit the misuse of the organization's funds.

10) Establishment and Operation of Separate Units. Even if you have no immediate plans to create separate units, this provision must be included in the charter. You can satisfy this requirement with a few formal statements such as:

• The organization may establish separate units that are not legal entities, subject to the decision of the General Assembly of the Organization.

• Separate units of the organization operate under its charter.

• The leaders of separate units are appointed by the General Assembly for a specified term and act based on a power of attorney.

• Separate units have the following authority: ... – and outline their specific powers.

It is also crucial to delineate the authority and obligations of the leaders of these separate units.

11) Procedure for Amending the Charter. Changes to the charter are initiated by the general assembly of organization members. Specifically, decisions concerning amendments and the individuals authorized to enact these changes are determined, and the amendments are subsequently registered with the appropriate authorities. The charter should also specify the quorum of members required to approve amendments.

12) Procedure for Termination (Reorganization) of the Organization and the Utilization of Its Funds and Other Assets. Firstly, this entails addressing the quorum of the assembly necessary to make such a decision. Secondly, the charter should stipulate that in the event of the organization's termination for any reason, its funds, property, assets, and any other valuables shall not be distributed among its members but shall be transferred as income to the government or another nonprofit organization chosen by the assembly.

These are all the provisions that should be incorporated into the charter. Naturally, this is a concise overview, and those familiar with the structure of a charter will comprehend this.

If you require assistance crafting an NGO's charter or its end-to-end registration, please don't hesitate to contact our team.