The charter of a non-profit organization must necessarily contain the structure of its governing bodies. The legislation provides that the management bodies of a non-profit organization can be mandatory or voluntary.
The legislation provides for governing bodies that are mandatory for each organizational and legal form of a Non-Profit Organization. This means that such bodies must be provided for by the charter of the Non-Profit Organization and formed at the time of the creation of the NPO. The remaining management bodies can be formed at the request of the founders, provided that the members of these bodies must be elected when creating the Non-Profit Organization and the charter of the NPO must provide for the competence of these “voluntary bodies”.
In our article we will consider in detail which bodies are required to be formed, and which can be formed at your discretion and how to spell out their powers in the charter.
- Supreme governing body of NPOs
- Absentee voting of the highest governing body of the NPO
- Executive bodies of NPOs
- Permanent governing body of a public organization
- Supervisory authorities of NPOs
- Control and audit body of NPOs
- Advisory body of NPOs
- Conclusions about organ structure
Supreme governing body of NPOs
Every non-profit organization must have a supreme governing body. The main function of the highest management body of a non-profit organization is to ensure that the non-profit organization adheres to the goals for which it is created.
For corporate non-profit organizations (based on membership), the highest governing body is a general meeting of members (for a regional and local public organization) or a conference or congress of delegates from the structural divisions of a public organization (for interregional and all-Russian public organizations), in which not everyone takes part members of the regional branch personally, and through representatives - delegates.
In non-profit organizations that are unitary (not based on membership), the functions of the supreme management body are performed by a special body, which is provided for in the constituent document, for example, in the Foundation - the Council or the Presidium. The fund is created by the founders - an initiative group. After state registration of the fund, all powers to manage the Fund are transferred to the highest collegial management body - the Council or Presidium, which the founder formed when creating the Fund.
In an Autonomous Non-Profit Organization, the organization is managed by the founder. The founder may have all the functions of the supreme management body. A supreme collegial governing body, for example a Council, may be formed. However, not all functions of the highest management body will be transferred to it. The founder will remain competent to appoint a manager, accept new founders, amend the charter, and determine the procedure for accepting founders. The fund has no such restrictions. There is no need to form a supreme collegial management body at all, and all the functions of the supreme management body will be carried out by the founder or founders.
In accordance with current legislation, there are issues in non-profit organizations, decisions on which can only be made by the highest management body . Such issues are called exclusive competence.
In a non-profit organization, the highest governing body is:
- determines the priority areas of activity of a non-profit organization, the principles of the formation and use of its property;
- makes changes to the charter of a non-profit organization;
- determines the procedure for admission to the founders (participants, members) of the NPO and excludes its founders (participants, members) from the composition,
- forms the bodies of a non-profit organization and terminates their powers early;
- approves the annual report and accounting (financial) statements of the non-profit organization, if the charter of the non-profit organization in accordance with federal laws does not fall within the competence of other collegial bodies of the non-profit organization;
- decides on the creation of other legal entities by a non-profit organization, and on the participation of a non-profit organization in other legal entities,
- decides on the creation of branches by a non-profit organization and the opening of representative offices;
- makes a decision on the reorganization and liquidation of a non-profit organization (exception - a foundation), on the appointment of a liquidation commission (liquidator) and on approval of the liquidation balance sheet;
- makes a decision on the approval of an audit organization or an individual auditor of a non-profit organization.
The law tells us that federal law and the charter of a non-profit organization may include other issues within the exclusive competence of the highest management body of a non-profit organization.
Issues that fall within the exclusive competence of the highest management body of a non-profit organization cannot be transferred for their resolution to another management body of the Non-Profit Organization. However, there are a few exceptions. For example, in the charter of a public organization, the exclusive competence of the highest management body may be less than in other forms of NPOs.
Thus, approval of the annual report and accounting (financial) statements of a public organization, making decisions on the creation of other legal entities by a public organization, on the participation of a public organization in other legal entities, on the creation of branches and on opening representative offices of a public organization, approval of an audit organization or an individual auditor of a public organization organizations, formation and early termination of powers of the sole executive body fall within the competence of the permanent collegial governing body of the public organization.
Responsibility
The law obliges the following persons to act in good faith and wisely in the interests of the company:
1) members of the corporation's corporate management company (supervisory board, board, etc.);
2) a person acting on behalf of the company by force of law;
3) a person acting on behalf of the company by virtue of another legal act;
4) a person acting on behalf of the company by virtue of the constituent document.
Losses caused to the company are subject to compensation by persons whose guilty actions caused them. The law obliges the following company representatives to compensate for these losses:
- the persons indicated above in paragraphs 2-4;
- members of the company's COU (with the exception of persons who cast their votes against the decision that caused losses to the company, or who did not participate in the voting);
- persons who had the actual ability to influence the actions of the corporation (for example, give instructions to the persons indicated in paragraphs 1-4 above).
The liability of these persons for unscrupulous (non-public companies) or unfair and unreasonable acts (public companies) cannot be limited or eliminated by entering into an agreement.
It will be insignificant. If such losses are caused jointly by these persons, then they have joint liability for compensation.
The liability of the persons specified in paragraphs 2-4 is possible only if it is proven that they exercised their rights and performed their duties in bad faith and unreasonably (for example, the actions of these persons do not correspond to the usual conditions of civil transactions).
The Supreme Arbitration Court of the Russian Federation, in its Resolution No. 62 of July 30, 2013, dwelt in more detail on the issues of dishonesty and unreasonable actions (inactions) of the company director.
By dishonesty of actions (inactions) of a manager, the court understands:
- actions of the director in the presence of a conflict between his personal interests (or his affiliates) and the interests of the organization (with the exception of cases when information about the conflict of interest was known in advance and the actions of the director were approved in the manner prescribed by law);
- concealing or providing false information to company participants about completed transactions;
- completing a transaction without approval, which is provided for by law or charter;
- retention of documents or evasion of their transfer after termination of their powers, if this entailed adverse consequences for the company;
- execution of a transaction by the head of an organization when he had information or should have known that such a transaction was being made on unfavorable terms for the company or that the other party would obviously be unable to fulfill its obligations.
By unreasonable actions (inactions) of a manager, the court understands:
- making decisions without taking into account information known to the director that is relevant in a given situation;
- reluctance to take steps to obtain necessary information before making a decision;
- completing a transaction without following the internal procedures that are usually performed when concluding such transactions (for example, the director entered into an agreement without the consent of lawyers or accounting).
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Absentee voting of the highest governing body of the NPO
The highest governing body of an NPO can make decisions without physically holding a meeting. Instead, voting can be done in absentia (by poll).
However, absentee voting can only be carried out on issues that do not fall within the exclusive competence of the highest governing body of a non-profit organization . Absentee voting can be carried out by exchanging documents through postal, telegraphic, teletype, telephone, electronic or other communications that ensure the authenticity of transmitted and received messages and their documentary evidence.
To be able to conduct absentee voting, the charter of the NPO must contain the procedure for conducting absentee voting. The proposed agenda must be sent to the members of the highest management body in advance. All members of the supreme governing body must be provided with the opportunity to familiarize themselves with all the necessary information and materials before voting begins. They should also be given the opportunity to propose adding an additional item to the agenda. If changes have been made to the agenda, all members of the highest management body must be notified of this before the start of voting on the amended agenda, as well as the end date of the voting procedure.
All decisions on absentee voting are recorded in a protocol, which must contain:
- the date before which documents containing information about voting by the highest management body of the non-profit organization were accepted;
- information about persons who took part in voting;
- voting results for each item on the agenda;
- information about the persons who counted the votes;
- information about the persons who signed the protocol.
A meeting of the highest management body of an NPO is valid if more than half of its members are present . All decisions that fall within the exclusive competence of the highest governing body of the Non-Profit Organization are made unanimously or by a qualified majority of votes of the members present at the meeting. On issues that are not within the exclusive competence, decisions can be made by a simple majority of votes.
In non-profit organizations based on membership, at the time of creation of the NPO, the highest management body is formed from the founders. After state registration of a corporate Non-Profit Organization, the founders automatically become members of the Organization and the supreme management body is formed from among the members of the organization. In unitary non-profit organizations, the supreme management body can be elected from third parties, that is, not from the founders.
Tortibility
It represents the responsibility of the bodies of a legal entity, their ability to independently compensate for property damage caused by their actions. Due to the fact that the behavior of the authorized structures of the company is considered the activity of the enterprise itself, it is obvious that it is it that must bear this burden. At the same time, a legal entity is also responsible for the actions of its employees, which are committed during the performance of the latter’s duties, as if they were their own. This provision is established in Art. 1068 Civil Code (clause 1). This is due to the fact that these actions are performed in pursuance of the orders (will) of the legal entity.
Executive body of a non-profit organization
The structure and competence of the executive bodies of most non-profit organizations are defined by law only in the most general terms. As a rule, the competence of such bodies is determined by the charter.
Each non-profit organization must have a sole executive body. It may be one or several. The title of the position of the sole executive body may be different, for example, President, Director, Chairman. If there are many sole executive bodies, then they may be called: President, Vice-President; Chairman, Deputy Chairman; President - Executive Director. A sole executive body, as a rule, is a person acting on behalf of a legal entity without a power of attorney. In this case, information about it is entered into the unified state register of legal entities.
As a rule, the sole executive body:
- without a power of attorney, acts on behalf of the NPO, including representing its interests and making transactions, on behalf of the Non-Profit Organization interacts with government bodies, local governments, state, commercial and non-profit Russian, foreign and international organizations and citizens;
- opens and closes bank accounts of a Non-Profit Organization;
- issues powers of attorney for the right of representation on behalf of the NPO, including powers of attorney with the right of substitution;
- carries out general management of the activities of the Non-Profit Organization;
- carries out general management of the activities of committees, councils, commissions, sections, associations and working groups created by the Non-Profit Organization;
- ensures the implementation of decisions of the General Meeting of members of the Non-Profit Organization, the implementation of programs, projects and activities of the NPO;
- within the limits of its competence, makes decisions and issues orders, orders and other acts on the activities of the Non-Profit Organization, binding on members and staff of the Non-Profit Organization;
- approves the rules, procedures and other internal documents of the NPO, with the exception of documents whose approval is within the competence of the highest management body by the NPO Charter;
- prepares materials, projects and proposals on issues submitted for consideration to the highest management body;
- establishes the number of staff members of the non-profit organization, determines the cost standards for remuneration of their labor;
- disposes of the property of the Non-Profit Organization within the limits established by the highest management bodies of the Non-Profit Organization, the Charter of the Non-Profit Organization and the current legislation of the Russian Federation;
- organizes the attraction of investments to expand the scope of activities of the Non-Profit Organization, financing its projects and programs;
- manages the international activities of the Non-Profit Organization;
- makes claims and lawsuits against Russian and foreign legal entities and citizens on behalf of the Non-Profit Organization;
- annually reports to the highest management bodies of the Non-Profit Organization on the results of its activities;
- exercises other powers that are not within the competence of other bodies of the Non-Profit Organization.
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Above we have given only examples of the activities of the head of an NPO. If an organization has two or more sole executive bodies, then competence is distributed between them. For example, a Nonprofit Organization has a President and an Executive Director. Competence in this case can be divided by transferring representative functions to the President, and the functions of conducting the internal activities of the NPO to the Executive Director.
In non-profit organizations, collegial executive bodies may be formed . For example, Management Board, Council, Presidium. In corporate organizations, such a body is formed from among the members of the organization. Often such a body is formed in Associations. The legislation does not establish the competence of this management body. As a rule, the collegial executive governing body includes (example for the Association):
- admission of new members to the NPO in the manner determined by the Charter and decisions of the highest governing body of the Non-Profit Organization;
- making a decision on the exclusion of members from the Non-Profit Organization in cases and in the manner provided for by the Charter and decisions of the highest management body of the Non-Profit Organization;
- maintaining a register of NPO members;
- making decisions on holding members of the Non-Profit Organization accountable for violating the norms of the Charter;
- approval of regulations, rules, procedures and other internal documents of the non-profit organization, with the exception of documents if this is not within the competence of other management bodies of the non-profit organization.
- ensuring the implementation of decisions of the highest management body of the Non-Profit Organization;
- preparation of materials, projects and proposals on issues submitted for consideration at the meeting of the highest management body of the Non-Profit Organization;
- formation of the agenda, convening and notification of the meeting to the highest management body of the Non-Profit Organization;
- determining the directions, amounts and procedure for spending funds and other property of the Non-Profit Organization;
- the creation of committees, commissions, sections, associations and working groups in the areas of activity of the Non-Profit Organization with the approval of regulations on them, the appointment of their leaders and the approval of their reports;
- submitting a report on the work done to the highest management body of the Non-Profit Organization;
- resolving other issues related to the activities of NPOs that are not within the exclusive competence of the highest management body of the Non-Profit Organization.
Many issues can be divided between the sole executive body of a non-profit organization and the collegial executive body of the non-profit organization.
Taxation systems for legal entities
Organizations registered on the territory of the Russian Federation may have several types of taxation:
- The general tax system or OSNO is the main regime used in our country. It is automatically assigned to all organizations and individual entrepreneurs upon registration. To change it, you must indicate another option and submit a corresponding application to the tax authority. This method is considered the most complex and has many nuances. Under this regime, the organization is obliged to pay all taxes that are provided in connection with the conduct of its business activities. For example, value added tax, profit tax, property tax and others.
- The simplified taxation system or simplified taxation system is considered the most profitable and simplest for accounting. Individual entrepreneurs and organizations with up to 130 employees and an income of less than 200 million rubles per year have the right to use this method. If these conditions are met, the company can pay only one tax in the amount of 6 percent of income or 15 percent of income minus expenses, depending on the pre-selected tax base.
- The Unified Agricultural Tax or Unified Agricultural Tax is a regime that can be used by entrepreneurs and organizations that have chosen the agricultural sector as their activity. It is important that income from agriculture accounts for at least 70 percent of total profits. If such conditions are met, it is also possible to replace all taxes with one and save time and money.
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PS Let me mention once again that a legal entity is also obliged to pay insurance premiums for its employees. This is 22% on payments within the established maximum value of the base for calculating contributions and 10% on payments in excess of the established maximum value of the base for calculating contributions.
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Permanent governing body of the NPO
Current legislation stipulates that a public organization must form a collegial permanent governing body , which operates in the period between meetings of the supreme governing body.
When creating a public organization, such a body is elected by the Constituent Assembly from among the founders of the Organization in the number determined by the Constituent Assembly.
The collegial permanent governing body exercises the rights of a legal entity on behalf of the NPO and performs its duties in accordance with the current legislation of the Russian Federation and the Charter.
As a rule, such a body:
- develops and submits for approval to the highest management body of the Non-Profit Organization the main directions and programs of the NPO’s activities;
- develops a system of measures to implement the statutory goals of the NPO within the framework of specific activities and programs carried out by the organization or with its participation;
- convenes the highest management body of the Non-Profit Organization, prepares documents and materials for the meeting of the highest management body of the Organization, approves the agenda of the meeting of the highest management body of the Non-Profit Organization;
- organizes the implementation of decisions made by the highest management body of the Non-Profit Organization;
- approves the functional responsibilities of each member of the collegial permanent governing body of the organization;
- approves the structure and staff of the organization’s workers;
- disposes of the funds and property of the NPO in the manner prescribed by the organization’s Charter; admits members to the organization, excludes members from the organization and maintains records of members of the organization in the manner determined by the supreme governing body of the non-profit organization;
- approves the Regulations on contributions to the organization in the manner determined by the highest management body of the NPO;
- approves the Regulations on the admission, withdrawal and expulsion of members of the Organization in the manner determined by the highest management body of the NPO;
- makes decisions on other issues that are not within the exclusive competence of the highest management body of a non-profit organization and other bodies of the organization.
Notification of participants about going to court
Participants of a company who decide to go to court have the obligation to notify other participants of the same company in cases of filing the following claims:
- on compensation for losses caused to the company;
- on declaring the transaction invalid;
- on the application of the consequences of invalidity of the transaction.
Such participants must also be provided with other information that is relevant to the issue.
The procedure for such notification may be provided for by law or in the company's articles of association.
The need to notify other participants about the upcoming trial is due to the fact that participants of the corporation who have not expressed a desire to join the statement of claim will no longer be able to go to court with identical demands in the future. The only exception to this rule is the presence of valid reasons for applying, which only the court has the right to establish.
Supervisory authorities of NPOs
Non-profit organizations may have a supervisory body. This is a body that does not implement the goals of creating a non-profit organization, but carries out supervision. However, this body must be formed only in the Fund.
In the Fund, this is the Board of Trustees, which oversees the activities of the Fund, the adoption of decisions by the Fund’s management bodies and ensuring their execution, the use of the Fund’s funds, and the Fund’s compliance with the legislation of the Russian Federation.
A board of trustees must be formed when the fund is created. The Founder or Founders of the Fund, when creating the Fund, elect a Board of Trustees of at least 2 members , and after its registration, the composition of the Fund's Board of Trustees is elected by decision of the highest governing body of the Fund. The term of office of the Board of Trustees can be up to 5 years.
In the Foundation, the Trustee is called upon to help attract financing for the Foundation’s statutory activities. Therefore, persons who enjoy authority and have a positive image, who have expressed support for the goals of the Foundation’s activities, as well as persons who provide financial support for the Foundation’s activities, can become members of the Board of Trustees.
Commercial legal entities
These are companies that primarily seek profit as the most important goal of operation. Among them are the types listed below.
Here we schematically see commercial legal entities
Business partnerships
This is the name of a community of several partners whose goal is to carry out common economic activities.
Business societies
These are commercial companies, divided into shares among the founders and having their own authorized capital.
Joint stock companies
These are business companies where its authorized capital is divided into a certain number of shares.
Producer cooperatives
This is a commercial company that is created through a voluntary community of citizens who have membership in the general business activity.
Unitary enterprises
This is an organization that does not have the right to own the property transferred to it. Such property is not divided into shares between the founders or employees of the company.
Peasant and farm households
These words characterize the type of activity that is associated with agriculture. This type of organization unites citizens who have joint property and carry out agricultural activities together.
Audit commission and auditor in NPOs
The legislation provides that a control and audit body may be formed in non-profit organizations. For some legal forms it is mandatory, for others it is not. Thus, a control and audit body must be formed in public organizations and movements, in associations and in charitable foundations. The Federal Law “On Charitable Activities and Volunteering (Volunteering)” tells us that an auditor must be formed in the Charitable Foundation. The legislation does not contain information about the competence of the auditor, but contains a reference to the fact that there should be one. The control and audit body of a Non-Profit Organization can be individual or collegial. For example, Auditor (single) or Audit Commission (collegial) . As a rule, in non-profit organizations only the Auditor is elected, since there is no mandatory requirement for the formation of a collegial body, which means that by electing one person to the position of Auditor, you have complied with the law. In the Bar Association, Law Office, Autonomous Non-Profit Organization, Foundation, the auditor may not be included in the structure of the governing bodies.
Restrictions
The powers of the bodies of a legal entity may, in addition to legislative requirements, be regulated by constituent documents. For example, to carry out certain transactions it is necessary to first obtain the consent of the collegial structure or the owner (founder). If these restrictions are provided for by regulation, then their non-compliance leads to the nullity of the concluded agreement with third parties, since the latter must know the legal requirements. Thus, a unitary enterprise cannot dispose of its own real estate without the consent of the founder-owner. This requirement is present in Art. 295 Civil Code. If certain restrictions are introduced by the Charter of a certain company (for example, a sole body is prohibited from concluding transactions for a certain amount without obtaining prior consent from a collegial body), then challenging the relevant agreements is allowed only if the counterparties’ knowledge of such prohibitions is proven.
Advisory body of NPOs
The advisory bodies of NPOs are classified as “voluntary” bodies of a non-profit organization. For example, in many Autonomous non-profit organizations that operate in the scientific field, a body called the Expert Council is formed. It is an advisory body. The function of such a council is to select and attract experts and leading specialists in the field of activity of the Autonomous Non-Profit Organization to fulfill the goals of the Autonomous Non-Profit Organization. Such a body can prepare expert recommendations on the activities of the autonomous non-profit organization and present them to the highest management body. As a rule, the competence of such a management body includes:
- determining priority areas for the development of the organization’s scientific activities and organizing research, conferences, consultations and seminars on the organization’s activities;
- presentation of the scientific position of the ANO at relevant conferences, consultations and seminars.
Reorganization or liquidation of a legal entity
A legal entity can terminate its activities in the legal field in two main ways:
- Reorganization;
- Liquidation.
Reorganization can take place by:
- Merger with another legal entity;
- Merger with another legal entity;
- Separation;
- Selection;
- Or transformation.
Liquidation is a complete cessation of activity based on a voluntary decision of the founders or a forced court decision. I will also mention that liquidation does not imply the transfer of rights and obligations to other related legal entities.
We may use different options to terminate our activities.
Goals and functions of the legal department
The key purpose of the legal department is not to represent the interests of the enterprise or ensure compliance with the law at all levels. The main goals are to maintain and increase profits. To maintain high company value, the legal service structure must perform the following functions:
- ensure the legitimacy of actions;
- work with internal documentation;
- develop contracts;
- monitor changes in legislation;
- draw up claims and claims, as well as keep records of these documents addressed to the enterprise itself;
- advise employees, partners and clients;
- interact closely with other structures of the enterprise.
Other functions can be listed, from tax and legal to registration. Each enterprise has rich legal functionality that should bring significant benefits.
Increasing and maintaining profits is possible only with the effective work of the legal department
