Registration of a charitable organization in Ukraine

1) Charitable organization - a legal entity whose founding documents define charitable activity as the main purpose of its activity.

2) Charitable activity does not involve the receipt of profit, as well as the payment of any remuneration or compensation to the benefactor.

3) There are the following types of charitable organizations:

• charitable society;
• charity fund;
• charitable institution.

What is a "charitable organization"?

A charitable organization is a legal entity under private law, the founding documents of which define charitable activity in one or more areas as the main purpose of its activity.

Charitable activity - voluntary personal and/or property assistance for the achievement of goals, which does not involve receiving a profit by the benefactor, as well as the payment of any reward or compensation to the benefactor on behalf of or on behalf of the person who received the charitable assistance.

Charitable organizations can be founded by physical and legal entities, in addition to state authorities, local self-government bodies, and other legal entities under public law.

In what areas is it possible to carry out charitable activities?

1. education;
2. health care;
3. ecology, environmental protection and animal protection;
4. prevention of natural and man-made disasters and elimination of their consequences, assistance to victims of disasters, armed conflicts and accidents, as well as refugees and persons in difficult life circumstances;
5. custody and care, legal representation and legal assistance;
6. social protection, social security, social services and poverty alleviation;
7. culture and art, protection of cultural heritage;
8. science and scientific research;
9. sport and physical culture;
10. human and citizen rights and fundamental freedoms;
11. development of territorial communities;
12. development of international cooperation of Ukraine;
13. stimulating the economic growth and development of the economy of Ukraine and its individual regions and increasing the competitiveness of Ukraine;
14. promoting the implementation of state, regional, local and international programs aimed at improving the socio-economic situation in Ukraine;
15. promotion of defence capability and mobilization readiness of the country, protection of the population in emergency situations of peace and war.

Charitable organizations can't provide charitable assistance to political parties or on behalf of political parties, as well as participate in election campaigning.

What are the types of charitable organizations?

A charitable organization can be created as:

Charitable society - a charitable organization, which was created by at least two founders and operates on the basis of the charter.

Charitable institution - a charitable organization, the founding act of which defines the assets that one or more founders transfer to achieve the goals of charitable activity at the expense of such assets and/or income from such assets. The founder or founders of the charitable institution do not participate in the management of the charitable organization.

Charitable foundation - a charitable organization that operates on the basis of the charter, has participants and is managed by participants who are not obliged to transfer any assets to this organization to achieve the goals of charitable activity. A charity fund can be created by one or several founders. Charitable fund assets can be formed by participants and/or other benefactors.

What are the governing bodies of the charitable organization?

The governing bodies of charitable societies and charitable foundations are:

• the general meeting of participants - the highest management body + performs the functions of the supervisory board in its absence;
• executive authority;
• the supervisory board - may not be created, provided that the number of participants does not exceed 10.

The governing bodies of charitable institutions are:

• supervisory board - the highest management body;
• executive authority.

The founding documents of a charitable organization may provide for the creation and operation of other bodies, but they must be accountable to the main governing bodies.

Does a charity have to pay taxes?

Charities are usually registered as non-profit, which is reflected in the Register of Non-Profit Institutions and Organizations. In this case, charitable foundations do not pay income tax, because they spend their income exclusively on financing their own maintenance, the realization of the purpose and directions of their activity, which are fixed in the founding documents.

If the organization receives income from activities that are not related to its statutory activity, and does not use such income to finance expenses for its maintenance or the implementation of the purpose of its activity, then the organization loses its non-profit status and is excluded from the register of non-profit institutions and organizations from the first day of the month following the one in which the violation was committed. After exclusion, the charity will pay 18% of the profit.

Also, if the organization, for example, pays wages, it will be necessary to pay personal income tax and military tax to the budget from the paid income, and to pay the social security tax at its own expense.