REPUBLIC OF LITHUANIA
LAW
ON CHARITY AND SPONSORSHIP FUNDS
Article 1. Purpose of the Law
1. The Law shall regulate the establishment, management,
activities, reorganisation and liquidation of charity and
sponsorship Funds (hereinafter referred to as the Fund).
2. 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 2. The Concept of the Fund
1. 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.
2. The registered office of the Fund must be in the Republic
of Lithuania.
Article. 3. The Status of the Fund
1. 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.
2. 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.
3. 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 4. Goals and Activities
1. 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, art, religion, sports, 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.
2. The goals of the Fund's activities, the spheres of
charity and sponsorship must be specified in the statutes of the
Fund.
3. The Fund shall dispense charity or sponsor in accordance
with the procedure established by the Law on Charity and
Sponsorship.
4. 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 5. The Founders
1. 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.
2. 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.
3. 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.
4. 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.
5. 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.
6. 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
1. The statutes are a legal document which governs the
Funds' activities.
2. 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.
3. The statutes may also contain other provisions which are
in compliance with the laws of the Republic of Lithuania.
4. 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.
5. The Fund's statutes must be adopted by the resolution of
the founders' meeting.
Article 7. 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 8. Affiliates
1. 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.
2. 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.
3. The property of the affiliate shall be recorded in the
Fund's financial records as well as in separate financial records
of the affiliate.
4. Affiliates shall be registered, re-registered and removed
from the register in accordance with the procedure established by
law.
5. 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 9. Rights and Duties
1. 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.
2. The Fund shall be prohibited from engaging in commercial
activities or from being a general partner of partnerships or
from borrowing funds.
3. The Fund shall be prohibited from participating in
political activities, sponsoring political parties and political
organisations.
4. 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.
5. 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.
6. The Fund's accounting year shall be calendar year.
Article 10. The Property
1. 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.
2. 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.
3. Contributions, gifts and legacy of founders and sponsors
may include cash, property (buildings, equipment, means of
transportation, etc.) and services.
4. The funds and property received for charity and
sponsoring may be used by the Fund only for the purposes
specified in the Statutes.
5. 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.
6. 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.
7. The resources of the Fund shall be accumulated and kept
in the banking institutions.
8. The property of the Fund may not be mortgaged, it may not
be used as a collateral to secure debt obligations of other
persons.
9. 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 11. 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 12. Founders' Meeting
1. 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.
2. 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;
7) set up enterprises belonging to the Fund.
3. 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.
4. 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 13. The Board
1. The Board is a collective body, run by its chairman. The
number of the members of the Board (at least three) shall be
prescribed by its statutes.
2. 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.
3. 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.
4. 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.
5. 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.
7. 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.
8. 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 14. The Administration
1. The activities of the Fund shall be organised and carried
out by the Administration.
2. 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.
3. 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.
4. 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.
5. 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.
6. 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.
7. 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 15. Control of Financial Activities
1. 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.
2. 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.
3. The Administration of the Fund and the Board must present
to the examiner (auditor) the accounts requested by him.
4. 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.
5. The examiner shall be liable under the laws for
inadequate control of the Fund's activities and for concealing
deficiencies.
6. 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 16. Reorganisation
1. The Fund may not be reorganised into the enterprise or
organisation of another type.
2. 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.
3. The Funds that are in operation after the reorganisation
shall take over the rights and liabilities of the reorganised
Fund.
4. 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.
5. Information concerning the reorganisation of the Fund
must be published on two separate occasions in "Valstyb‰s _inios"
(Official Gazette), with an interval between the two publications
of at least 30 days.
6. The reorganised Funds shall be registered in the manner
prescribed by laws.
Article 17. Liquidation
1. 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.
2. 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.
3. 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.
4. 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 18. 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 within one year from the
coming into effect of this Law.
I promulgate this Law passed by the Seimas of the Republic
of Lithuania.
Algirdas Brazauskas
President of the Republic
Vilnius
14 March 1996
No. I-1232