Posted on April 9, 2018 in Procedures

Registration of NGO in Bulgaria – foundations and associations, private and public benefit.

There’s two types of non-profit legal entities (NGOs) – associations and foundations are envisaged in the Bulgarian legislation. In addition, the Juridical Persons with Non-Profit Purposes Act (JPNPA) also provides for two different statuses under which any association or foundation can exist: status in private benefit and public benefit status. The decision on which of the two statuses to be held by each organisation is taken by himself by the particular NGO (by its founders or by its supreme body). When choosing the purposes, activities and status of the organisation for public or private benefit, the two types of NGOs are fully level.

NGO’s cannot carry out commercial activity. Non-profit-making legal entities may engage in additional business only if this activity relates to the subject-matter of the principal activity for which they are registered and provided they use the proceeds of the additional business to achieve the objectives set out in the statutes. The commercial activity is subject to the conditions and the order determined by the laws, which regulate the corresponding type of commercial activity. These legal entities do not distribute profit from any activity.

Public or private benefits

Each NGO is obliged to identify as an organisation for private or public benefit upon its establishment. The determination shall be made in the statutes or in the instrument of incorporation and shall be entered in the court register. NGOs in private benefit can change their status and be defined for public benefit, but the opposite is impossible. NGOs in public benefit receive tax relief from the state and the opportunity to manage state and municipal properties under a lighter regime.

Establishment of an association

When establishing an association for private benefit, a minimum of 3 founders are required, regardless of whether they are physical or legal persons. If the association is in the public interest, the founders must be at least 7 individuals or 3 legal entities. In order to establish an association it is necessary to hold a constituent assembly in order to decide on the name, seat and address, status, objectives, object of activity, adoption of statutes and the first governing body. The decisions to be taken at the constituent assembly shall be recorded in a record. The court registration of the association shall be filed with the district court at its registered office with a request for its entry in the court register.

Establishing a foundation

The foundation is established by a unilateral constitutive act. Lifetime this is done by a donation, which must be done in writing with a notary certification of the founder’s signature, but after his death – by will. The statutes provide property, name, headquarters and address of the Foundation, the objectives and means for achieving them, and the first composition of the Foundation’s bodies. It is also necessary to prepare a drafting act. It details the Foundation’s organs, powers, way of work, termination. It shall be open a special bank account on which to make the specified donation in case it is in money. The court registration of the foundation shall be filed with the district court at its seat requesting its entry in the court register.

Main differences between association and foundation

  • The association has members as long as the foundation does not have
  • When establishing a Foundation, the founder (s) may reserve certain rights to him / her to take part in the management afterwards.
  • Different organ structure. The obligatory bodies of the associations are the General Assembly and the Managing Authority. For foundations, the type of organs depends on the will of the founders and the benefits in which they operate (usually have a supreme body and a governing body);
  • Different requirements by establishment. It is sufficient for the establishment of an association to have the minimum number of founders (3 to 7 or more). To establish a foundation, it is enough to have one person – founder, regardless of whether it will be determined for private or public benefit. However, in order to establish a foundation, it is obligatory for the founder to make a foundation grant (in money or other property).
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