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Article 10. The Property

Article

  1. The Property Official translation REPUBLIC OF LITHUANIA LAW ON CHARITY AND SPONSORSHIP FUNDS 14 March 1996 No. I-1232 Vilnius (As amended by 30 April 1997, No.VIII-211) Article
  2. Purpose of the Law
  3. The Law shall regulate the establishment, management, activities, reorganisation and liquidation of charity and sponsorship Funds (hereinafter referred to as the Fund).
  4. The Law shall not apply to credit institutions and insurance organisations which carry the name of the Fund as well as to Funds which are established under separate laws or international agreements with other states and international organisations and which are governed by the terms and conditions of the agreement. Article
  5. The Concept of the Fund
  6. The Fund is a non-profit organisation without a membership the purpose of activities whereof is dispensing of charity or (and) sponsoring science, culture, education, art, religion, sports, health care, social care and assistance, environmental protection and other areas specified in the Law on Charity and Sponsorship. A non-profit organisation means an entity possessing the rights of legal person which has been set up in accordance with the procedure established by law and the purpose of activities whereof is not profit seeking.
  7. The registered office of the Fund must be in the Republic of Lithuania. Article.
  8. The Status of the Fund
  9. The Fund shall be a legal person having a seal with its name and a settlement account. The Fund shall be liable for its obligations to the extent of all its property.
  10. The Fund shall be free to choose its name according to the sphere of its activities. A non-profit organisation of the type shall be referred to in the statutes as "the Fund." The name and symbols of the Fund must be in compliance with the requirements of the Regulations of Firm Names approved by the Government.
  11. The Fund shall enjoy freedom of activities, initiative and decisions granted by the Constitution of the Republic of Lithuania, this Law and other laws of the Republic of Lithuania and in its activities shall abide by the statutes registered in accordance with the procedure established by this Law. Article
  12. Goals and Activities
  13. In its activities the Fund may pursue the following goals: 1) giving financial aid and rendering free assistance to the disabled, sick persons, lonely individuals incapable of work, orphans or children who have lost parental care or who live in a single-parent family, to families with many children and families with little income, to unemployed persons whose income cannot guarantee the minimum living standard; 2) giving financial aid to persons who are victims of war, natural or ecological disasters, epidemics of infectious diseases, helping liquidate the consequences of the above-mentioned disasters and epidemics; 3) helping persons who have become jobless find new employment or train for a new profession; 4) supporting programmes of development of science, culture, education, health care, social care and assistance; 5) promoting programmes of environmental protection and landscaping works; 6) supporting programmes of history, architecture, cultural properties protection, preservation and restoration works; 7) promoting other activities of social utility and social programmes announced by the Government; 8) backing village, township, town and regional development projects and programmes; 9) supporting other projects and programmes which are significant for the community.
  14. The goals of the Fund's activities, the spheres of charity and sponsorship must be specified in the statutes of the Fund.
  15. The Fund shall dispense charity or sponsor in accordance with the procedure established by the Law on Charity and Sponsorship.
  16. The Fund may not dispense charity or sponsor or in any other way distribute income to the Fund's founders, members of management bodies or employees except in cases where they are objects of financial aid as laid down in the Fund's statutes. Article
  17. The Founders
  18. The founders of the Fund shall be natural and legal persons who obligate themselves, prior to the registration of the Fund, to allot monetary or property contributions and provide services to the Fund. The Fund may be founded by natural and legal persons of the Republic of Lithuania and other foreign states, international organisations. Political parties and political organisations as well as state power and government institutions which control financial accounting activities of Funds may not be founders of the Fund.
  19. The founders of the Fund shall have the following non-property rights: 1) to participate in the founders' meetings with the casting vote; 2) to be furnished information on the Fund's activities; 3) to appeal to court against the resolutions of the founders' meeting or the Board or the decisions of the Administration.
  20. The number of founders of the Fund shall not be restricted. The founders who fail to fulfil their obligations may be expelled, whereas the Fund's sponsors who obligate themselves to allot monies to the Fund may be granted the rights of founders established by this Law. Only the founders' meeting shall have the power to expel a founder and to grant a sponsor the rights of the founder. The procedure for expelling the founder and granting sponsors the rights of the founder must be laid down in the statutes.
  21. The founders shall conclude the founding agreement. In the event that the Fund is being established by one person, he shall draw up the deed of founding instead of the founding agreement and the requirements of the latter shall apply to the deed. Reference to other documents shall be permitted in the founding agreement. Said documents must be appended.
  22. The following must be stated in the founding agreement (deed): 1) the founders (full names, names of legal persons) and their addresses; 2) the name of the Fund; 3) the goals of the Fund; 4) the founders' obligations; 5) compensation of founding expenses; 6) duration of the Fund's activities.
  23. The founding agreement shall be signed by all founders or persons authorised by them. In case at least one founder is a natural person, the agreement must by certified by a notary. If all the founders are legal persons or enterprises without the rights of legal person, the signatures of their manager or the authorised person shall be certified with a seal. The procedure established for natural persons shall apply to the legal persons of a foreign state. Article 6 The Statutes
  24. The statutes are a legal document which governs the Funds' activities.
  25. The following must be stated in the statutes: 1) the name of the Fund; 2) the Fund's registered office (address); 3) the Fund's founders (full names, names of legal persons) and their addresses; 4) the founders' rights and duties; 5) the procedure of the founders' withdrawal (expulsion) from the Fund and of granting the sponsors the rights of the founder; 6) the goals and duration of the Fund's activities, the spheres of charity and sponsorship; 7) sources of the Fund's income, the procedure for using the Fund's revenue and property; 8) the procedure for forming the managing bodies and for removing said bodies, their competence; 9) control of financial activities; 10) the procedure for amending and supplementing the statutes; 11) the procedure for establishing and liquidating affiliates, their powers; 12) the procedure for reorganising and liquidating the Fund.
  26. The statutes may also contain other provisions which are in compliance with the laws of the Republic of Lithuania.
  27. If the activities provided for by the statutes of the Fund are regulated by other laws of the Republic of Lithuania, said laws must be complied with while drawing up the Fund's statutes.
  28. The Fund's statutes must be adopted by the resolution of the founders' meeting. Article
  29. Registration Funds as well as affiliates of foreign state Funds in Lithuania shall be registered, re-registered and removed from the register in accordance with the procedure established by the laws of the Republic of Lithuania. Article
  30. Affiliates
  31. Funds shall have the right to set up affiliates. They shall be set up in accordance with the procedure specified in the Fund's statutes.
  32. An affiliate shall be the Fund's subdivision with a separate registered office. An affiliate is not a legal person and shall use the name of the Fund as a legal person. Affiliates shall operate in compliance with the powers granted by the Fund's statutes which must also be specified in the affiliates' statutes.
  33. The property of the affiliate shall be recorded in the Fund's financial records as well as in separate financial records of the affiliate.
  34. Affiliates shall be registered, re-registered and removed from the register in accordance with the procedure established by law.
  35. The affiliates of foreign state Funds (charitable organisations) which are in compliance with the laws of the Republic of Lithuania shall be registered under the laws of the Republic of Lithuania. Article
  36. Rights and Duties
  37. In order to conduct the activities provided for in the statutes, the Fund may: 1) have one settlement account and one foreign currency account only with the banks registered in the Republic of Lithuania; 2) possess legally acquired property, manage and use the property and dispose thereof; 3) assume obligations and conclude contracts with partners; 4) pay for goods and services in accordance with the procedure established by law; 5) form non-profit organisations and withdraw from them; 6) set up an enterprise belonging to the Fund with the monies provided for in Article 10, paragraph 6, sub-paragraph 2 of this Law. Such enterprises shall be established and shall operate in accordance with the law on the enterprises of the appropriate type.
  38. The Fund shall be prohibited from engaging in commercial activities or from being a general partner of partnerships or from borrowing funds.
  39. The Fund shall be prohibited from participating in political activities, sponsoring political parties and political organisations.
  40. The Fund shall have the right to refuse to accept monies or property from potential sponsors if by taking advantage thereof sponsors or their group may exert influence over the Fund's activities for their own or other persons' benefit.
  41. Funds must keep records of charity and sponsorship specifying the donors of charity and sponsors as well as the donees and the amount and purpose of charity and sponsorship. The Funds shall conduct accounting, present financial accounting data to state institutions and pay taxes; their financial accounting activities shall be controlled.
  42. The Fund's accounting year shall be calendar year. Article
  43. The Property
  44. The Fund may own the property by the right of ownership, legitimately acquired for the carrying out of statutory activities. The property of the Fund shall be treated separately from the property of the founders.
  45. Income sources of the Fund may be as follows: 1) contributions of the founders and otherwise allocated resources; 2) funds and property donated by sponsors; 3) legacies left to the Fund; 4) interest paid by credit institutions on the funds kept in them; 5) profit of the enterprises belonging to the Fund and the enterprises of which the Fund is a co-owner; 6) funds and property allocated for special projects and programmes from analogous Funds, programmes and projects.
  46. Contributions, gifts and legacy of founders and sponsors may include cash, property (buildings, equipment, means of transportation, etc.,) and services.
  47. The funds and property received for charity and sponsoring may be used by the Fund only for the purposes specified in the Statutes.
  48. The sponsor of the Fund may specify the spheres wherein the funds (property) allocated by him may be used, but only for the activities provided for in the Statutes. The Fund must, at the request of the sponsor, furnish information necessary in order to control how the Fund fulfils the conditions established by the sponsor.
  49. The Fund shall have the right to apply part of charity and sponsorship funds for the following purposes: 1) administration expenses and development of the Fund's activities - up to 20 percent of its annual income; 2) for the establishment and development of enterprises belonging to the Fund - up to 50 percent of its annual income, including the expenses specified in sub-par. 1 of this par.
  50. The resources of the Fund shall be accumulated and kept in the banking institutions.
  51. The property of the Fund may not be mortgaged, it may not be used as a collateral to secure debt obligations of other persons.
  52. The receipts of the Fund from the activities which are not provided by the Statutes, as well as receipts generated or applied in violation of this law, shall be transferred to the State Budget in the manner prescribed by laws. Article
  53. Managing Bodies The managing bodies of the Fund shall include the meeting (conference) of the founders, the board and the administration. By the resolution of the founders' meeting a supervisory board may be formed. Article
  54. Founders' Meeting
  55. The founders' meeting (conference) shall be the supreme managing body of the Fund. If the Fund has been founded by one person, his written decisions shall be of equal power with the resolutions of the founders' meeting.
  56. The founders' meeting shall have the power to: 1) adopt, amend and supplement the statutes; 2) expel founders, confer the rights of founders on the sponsors; 3) elect (appoint) members of the Board and the auditor, and remove them from office; 4) fix remuneration for the members of the Board and the auditor and for the head of the Administration if he is a member of the Board; 5) confirm work statement of the Fund; 6) reorganise and liquidate the Fund.
  57. The procedure for convening a founders' meeting shall be prescribed by the statutes. The resolutions of the meeting shall be adopted in accordance with the procedure established in the statutes of the Fund. When adopting resolutions, each participant at the meeting must have one vote.
  58. The founders' meeting may delegate part of its functions, with the exception of functions specified in sub-par. 1, 2, and 6 of par. 2 hereof, to a special supervisory body - the Supervisory Board formed from the founders and public figures. The procedure for the formation of the Supervisory Board, the delegation of functions, the relationship between the Supervisory Board and founders' meeting, as well as the procedure for the adoption of decisions shall be established by the statutes of the Fund. Article
  59. The Board
  60. The Board is a collective body, run by its chairman. The number of the members of the Board (at least two) shall be prescribed by its statutes.
  61. Members of the Board and its chairman shall be elected by the founders' meeting for the term established by the Statutes. Members and its chairman may be removed from their posts or may be elected for another term.
  62. A member of the Board (chairman) may resign from office prior to the expiry of the term, upon giving written 14- day notice to the Board.
  63. The majority of the Board members may not consist of the persons related by blood or by marriage. At least half of the Board members must be residents of the Republic of Lithuania. The majority of the Board members may not be the employees of the Fund's Administration. The statutes may provide for additional requirements with respect to the members of the Board.
  64. The functions of the Board shall be as follows: 1) to establish the structure of the Fund, the official positions of the Administration employees, their salaries, and procedure for taking on a job; 2) to appoint and dismiss from office the head of the Administration and chief financier ( book-keeper) ; 3) to work out the strategy and programme of the Fund's activities; 4) to allocate funds for charity and sponsorship; 5) to confirm the valuation of property contributions; 6) to analyse work statements of the Fund, income and expenditure estimates, the findings of the audits, stock -taking and other inventory records; 7) to present work statements to the founders' meeting.
  65. The powers of the Board shall be established by the statutes of the Fund. The meeting shall be valid if it is attended by at least 2/3 of all the members of the Board. The decisions shall be adopted by a simple majority vote. Members of the Board shall have equal voting rights. In case of a tie, the chairman's vote shall be casting. The procedure for calling meetings shall be established by the statutes.
  66. The chairman and members of the Board must compensate jointly for losses incurred by the Fund by reason of the decisions of the Board, adopted in violation of the statutes of the Fund, this and other laws of the Republic of Lithuania. Persons who voted against, abstained or did not attend the meeting at which such decision was adopted shall be exempt from the obligation to compensate for the losses. Disputes concerning the compensation for losses shall be settled in court. Article
  67. The Administration
  68. The activities of the Fund shall be organised and carried out by the Administration.
  69. In its work, the Administration shall be governed by the laws of the Republic of Lithuania and other legal acts, the statutes of the Fund, office regulations and decisions of the Board.
  70. The Fund must have the head of the Administration and chief financier (book-keeper). One and the same person may not hold these posts concurrently.
  71. The Board of the Fund shall appoint the head of the Administration and chief financier (book-keeper), fix their official salaries and conclude with them employment contracts. The salary of the Administration head, who is a member of the Board of the Fund shall be fixed by the founders' meeting. Other employees shall be taken on a job and employment contracts shall be concluded with them by the head of the Administration.
  72. The Board of the Fund may terminate the employment contract with the head of the Administration in accordance with the procedure established by the Law on Employment Contract and prior to the termination of the contract - restrict his powers.
  73. The head of the Administration shall have the right to enter into transactions of the Fund in accordance with the Fund's statutes, decisions of the Board, and office regulations. The statutes of the Fund may establish spheres of activities wherein other authorised persons may act independently or enter into transactions of the Fund. The head of the Administration shall represent the Fund in court, state power and government institutions, as well as in dealing with other persons.
  74. The head of the Administration and its employees must indemnify losses caused to the Fund through their fault according to the procedure established by laws. Article
  75. Control of Financial Activities
  76. The Fund must perform inspections of financial activities at the intervals prescribed by the statutes. The inspections shall be performed by the examiner or the auditor, who will be elected by the founders' meeting for the term established by the statutes. A natural or legal person, with the exception of a founder, a member of the Board or an employee of the Administration may be an examiner or auditor.
  77. The examiner must: 1) inspect annual accounts of the Fund and other accounting documents; 2) at the instructions of the founders and the Board, perform the Fund's financial accounting inspections; 3) notify the next scheduled founders' meeting or meeting of the Board of the violations disclosed during the inspections.
  78. The Administration of the Fund and the Board must present to the examiner (auditor) the accounts requested by him.
  79. The Fund may pay to the examiner (auditor) a remuneration. The amount of the salary or payment conditions of a remuneration shall be determined by the founders' meeting.
  80. The examiner shall be liable under the laws for inadequate control of the Fund's activities and for concealing deficiencies.
  81. The State Control institution shall control, in the manner prescribed by laws, how the funds allocated from the state and municipal budgets are being used for charity and sponsoring. Article
  82. Reorganisation
  83. The Fund may not be reorganised into the enterprise or organisation of another type.
  84. The Fund may be reorganised by the resolution of the founders' meeting. The Fund may be reorganised in the following ways: 1) by joining other Funds; 2) by dividing the Fund into several separate Funds.
  85. The Funds that are in operation after the reorganisation shall take over the rights and liabilities of the reorganised Fund.
  86. When reorganising the Fund, its property must be valued. The auditor or examiner must present in writing the report concerning the property prior to the founders' meeting at which the reorganisation of the Fund shall be considered.
  87. Information concerning the reorganisation of the Fund must be published on two separate occasions in "Valstybës þinios" (Official Gazette), with an interval between the two publications of at least 30 days.
  88. The reorganised Funds shall be registered in the manner prescribed by laws. Article
  89. Liquidation
  90. The Fund may be liquidated on the following grounds: 1) the time of the Fund's duration as specified in the Statutes has expired; 2) the resolution of the founders' meeting; 3) the court's decision to liquidate the Fund for the violations of law established by the laws.
  91. The institution that has decided to liquidate the Fund shall appoint a liquidator and establish his powers. After the liquidator is appointed, the Fund shall acquire the status of the Fund in liquidation: its managing bodies shall be divested of the powers to manage the Fund and their functions shall be performed by the liquidator.
  92. Upon liquidation of the Fund, the liquidator must draw up the act of liquidation, remove the Fund from the register, and return registration certificate to the Registrar who issued it.
  93. When liquidating the Fund its property and proceeds from the sale of property must be conveyed to another Fund or Funds that pursue similar objectives, declared in the statutes of the Fund and if such Funds do not exist - to other Funds. The Fund (Funds) - the successor (successors) shall be determined by the liquidator. Article
  94. Final Provisions All charitable organisations and charitable Funds registered up till now must revise their statutes according to this law, and register them with the Registrar prior to 1 October
  95. I promulgate this law, passed by the Seimas of the Republic of Lithuania. PRESIDENT OF THE REPUBLIC ALGIRDAS BRAZAUSKAS

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