Date of entry into
force:
February 3, 2013
(Abstract)
The Law determines the general principles of charity work in Ukraine,
provides for legal relations in the society aimed at developing charity work,
asserting humanism and compassion, and creates favorable conditions for the
creation and functioning of charity organizations.
Article 1 of the Law provides definitions of terms used in it. For example,
charity work is voluntary personal and/or material assistance for the purposes
determined by the Law, which does not entail a profit for the benefactor, or
payment of any fee or compensation to the benefactor by or on behalf of the
beneficiary. A charity organization is a legal entity of private law, whose
constituent documents stipulate that its main objective is charity work in one
or several spheres. Philanthropic work is charity work in the spheres of
education, culture and the arts, protection of cultural heritage, science and
scientific research, carried out according to the procedure established by the
Law and other laws of Ukraine.
The purposes and spheres of charity work are established by Article 3 of
the Law.
According to Article 4 of the Law, the entities involved in charity work
are:
·
charity organizations created and working according to
the Law;
·
other benefactors (legally capable natural persons or
legal entities of private law (including charity organizations) that
voluntarily carry out one or several types of charity work);
·
beneficiaries (recipients of charity (natural persons,
non-profit organizations or territorial communities) that receive assistance
from one or several benefactors, for the purposes determined by the Law).
Article 5 of the Law envisages the following types of charity work:
·
free transfer of ownership of funds or other property
to beneficiaries, and free assignment of property rights to beneficiaries;
·
free transfer of the right of use, other corporeal
rights, and property rights, to beneficiaries;
·
free transfer of income from property and property
rights to beneficiaries;
·
free provision of services and completion of works for
the benefit of beneficiaries;
·
joint charity work and performing other contracts
(agreements) on charity work;
·
public collection of charitable contributions;
·
managing charity endowments;
·
executing wills, charitable bequests and charity
inheritance agreements;
·
holding charity auctions, non-monetary lotteries,
competitions and other charity events not prohibited by the law.
A charitable donation is a free transfer of funds, other property or
property rights by the benefactor to the beneficiary for the purpose of
achieving specific objectives of charitable work determined according to the
Law. A charitable grant is a special-purpose assistance in the form of currency
assets, which must be used by the beneficiary during the term determined by the
benefactor. A charitable donation may be granted to beneficiaries determined
through a competition, by the benefactor or his authorized persons. The terms
of the competition may determine the actions that the beneficiary must carry
out in favor of third persons, except those affiliated with the benefactor. The
purpose and procedure for using the charitable donation may be changed by
consent of the benefactor or his successors, as well by a court ruling, or in
other cases provided for by law or the legal relations of the benefactor. The
benefactor or his authorized persons have the right to control the
purpose-oriented utilization of the charitable donation, including in favor of
third persons (Article 6 of the Law).
Article 8 of the Law establishes that benefactors have the right to set up
easements of land plots or other immovable property in favor of charity
organizations or other beneficiaries, subject to their use for the purposes of
charity work.
Philanthropist work is preparation or support of charity events related to
creation, reproduction or use, according to the procedure established by the
legislation, of creative products and other objects of the intellectual
property right, including charity performances, subject to free access to such
events. This provision does not apply to events related to advertisement
(except public service advertising), election campaigning, and reproduction or
use of commercial (brand) names, trademarks (product and service logos) and
industrial prototypes protected according to the law (Article 10 of the Law).
According to Article 12 of the Law, charity organizations can be founded by
legally capable natural persons and legal entities, except state authorities,
bodies of local self-government, and other public legal entities. Charity
organization founders or their authorized persons make the decision to found
charity organizations, approve their constituent documents and the membership
of the management bodies, and make other decisions related to creation and
state registration of charity organizations. Charity companies and charity
funds may have, in addition to founders, other participants that joined
according to the procedure established by the statutes of such charity companies
or charity funds.
A charity organization can be created as a charity company, charity
institution or a charity fund, with regard to the specifics established by the
Law and other laws of Ukraine (Article 13 of the Law).
Article 16 of the Law envisages that charity organizations have property
rights and other corporeal rights for funds, securities, land plots, other
movable and immovable property, and intangible assets, unless otherwise
established by law or their constituent documents. The use of assets (incomes)
and legal relations of charity organizations must not be in conflict with
legislative acts and the objectives of charity work. The amount of
administrative expenses of a charity organization must not exceed 20% of the
organization’s income in the current year. Expenses related to managing
charitable endowments are included in the administrative expenses of the
charity organization, unless otherwise established by the legislation or by
legal relations between the charity organization and the benefactor. Charity
organizations have the right to carry out non-profit business activity that
facilitates achieving their statute objectives.
The decision to liquidate a charity organization is made by the management
body authorized by the constituent documents of the charity organization. The
bases for a court decision to liquidate a charity organization are determined
by the law. Assets remaining after liquidation of a charity organization and
satisfaction of all creditor demands may be transferred to one or several
charity organizations according to the procedure established by the constituent
documents, or by decision of a court (Article 18 of the Law).
The procedure for management of charity organizations is envisaged by
Chapter IV of the Law.
The final provisions of the Law envisage declaring null and void the Law of
Ukraine “On Charity and Charity Organizations” N531/97-VR of September 16,
1997.
The Law also introduces appropriate amendments to Article 131 of the Civil
Code of Ukraine, Article 197 of the Tax Code of Ukraine, Articles 1 and 2 of
the Law of Ukraine “On Humanitarian Aid”, and Articles 3, 10 and 29 of the Law
of Ukraine “On State Registration of Legal Entities and Natural Persons –
Entrepreneurs”.
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