BASIC PRINCIPLES ON WHICH THIS LAW IS BASED

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1 1. REASONS FOR ENACTING THE LAW With the Constitution of the Republic of Macedonia (Official Gazette of RM, No. 52/91), citizens are guaranteed the freedom of association for their economic, social, cultural and other rights and beliefs, from which it arises that they can establish citizen associations. Citizens may join or withdraw from these (associations) only in a manner and by a procedure as determined by Law. In parallel to this, the need appears for normative-legal regulation of the organisations that have no membership of their own, but which possess a certain amount of assets, which are intended (collected) for the fulfilment of the statutory goals of the respective organisation (this concerns foundations). Because the term foundation has not been covered in more detail by our legislation, and having in mind that these two types of organisations act in an identical social area, it became necessary to determine the foundation legally with this normative act, together with the citizen association. The enactment of a special Law on Citizen Associations and Foundations is a need of the new democratic political system, where citizens can associate assets freely, or they can associate themselves, in order to fulfil economic, social, cultural, sports and other kinds of needs. Until now, only the citizen association of this kind was regulated by the Law on Social Organisations and Citizen Associations, whose provisions have already been surpassed, and a part of them are in contrary to the Constitution of the Republic of Macedonia and are not covered by any other Law. In conformity with Article 6 of the Constitutional Law on Implementation of the Constitution of the Republic of Macedonia, the laws that do not conform to the constitutional provisions should already have been harmonised within one year from the enactment of the Constitution. Based upon the above, it is proposed to enact this Law. II. BASIC PRINCIPLES ON WHICH THIS LAW IS BASED principles: The Law that is proposed for enactment is based upon the following basic 1

2 - freedom of association of citizens or assets, in order to exercise and protect their economic, social, cultural, sports and other rights and beliefs; - freedom of establishing citizen associations, joining and withdrawing from them; - protection of citizen freedoms to associate in citizen associations; - the programme and activity of citizen associations and foundations cannot be directed towards violent overthrow of the constitutional system of the Republic of Macedonia or towards instigation to or calling out for military aggression or exciting national, racial or religious hatred or intolerance; - publicity in the operation of a citizen association and foundation. III. CONTENTS OF THE LAW The contents of this Law covers the basic relations that are regulated by it, and the manner in which their implementation is proposed. A certain number of relations will be enabled, which will appear in the respective areas of establishment and operation of the associations and foundations, to be regulated in an independent and creative manner through their statutes. 2

3 LAW ON CITIZEN ASSOCIATIONS AND FOUNDATIONS I. GENERAL PROVISIONS Article 1 This Law regulates the manner, conditions and procedure for founding, registration, operation, and termination of citizen associations and foundations. This Law regulates the status issues related to the citizen associations and foundations, i.e. the manner, conditions and procedures for their founding, registration, operation and termination. Thus, this Law regulates in a single and comprehensive manner the forms and types of civic association (of people and material assets), which represents a basis for the building and development of civic society in our country. Article 2 Citizens may associate freely in citizen associations and establish foundations in order to exercise and protect economic, social, cultural, scientific, professional, technical, humanitarian, educational, sports and other rights, interests and beliefs, in conformity with the Constitution and Law. The citizen associations and foundations are non-profit organisations. If profit is made in the operation of citizen associations and foundations, it must be used exclusively for support to and implementation of their goals and activities determined by the statute. In conformity with Article 20 of the Constitution of the Republic of Macedonia, citizens are guaranteed freedom of association as one of the basic human rights in order to exercise and protect their political, economic, social, cultural and other rights and beliefs. Thus, from this constitutional provision it arises that citizens may associate, i.e. establish: 1. Citizen associations; 2. Foundations 3

4 Citizen associations and foundations are the two basic forms of non-profit organisation, whose existence is connected with the association of people (in an association), or of assets (in a foundation), exclusively for the exercising of the statutorily (but also constitutionally and lawfully) determined goals, rights, interests and beliefs. 1 As a result of the basic postulates for the establishment of citizen associations and foundations (in conformity with the framework provided by the Constitution, and operationalised by this Law), and because according to this Law they are non-profit, if citizen associations and foundations make a profit out of their operation, this profit may be used exclusively for the fulfilment of their goals and activities as determined by their statutes. In case the profit is not distributed in accordance with Article 2 paragraph 3 (for support and fulfilment of the activities) from this Law, then the respective citizen association or foundation looses the nature of a non-profit organisation, and in conformity with this Law, it shall cease to exist. For more details on this issue, see Articles of the Law. Article 3 The citizen associations and foundations may not perform political activities or use their property and assets for implementation of the goals of political parties. A political activity in the sense of paragraph 1 of this Article is understood to be direct participation in an electoral campaign, or fund raising for an electoral campaign and financing political parties. In conformity with Article 20 of the Constitution of the Republic of Macedonia, citizen associations and foundations are founded in order to fulfil their statutory goals. This implies that activities by numerous organisations registered according to this Law have as field of their activity areas that certainly possess points of contact with political processes 1 In some countries, besides these legal forms (citizen associations and foundations), other organisations exist which according to their nature do not have a founding asset (as in the case of a foundation), or do not have membership (as in the case of a citizen association), but still the nature of their activities (for example - non-profit, activity in the name of a wider public interest, etc.) makes them compatible with this group of organisations. Some institutes, centres or humanitarian organisations may be of this type. 4

5 and practical implementation of politics in a society. Of course, this dimension in their activity should be promoted further. The intention of this provision is to implement a clearer distinction between direct political involvement and orientation of activities, and the one that would address other more specific interests, for which it is understood and expected to exceed the limits of closely determined political belonging. In the implementation of their goals, these organisations may formally (declaratively) support some political party or coalition, but they cannot participate directly in an election campaign or fund political parties with their assets, or raise funds for them. Thus, citizen associations and foundations cannot be engaged in traditional political activities, nor can they transform themselves (in conformity with Article 6 paragraph 3 of this Law) into a political party, or become a branch of some existing political party. If they exercise political activities listed in paragraph 2 of this Article, this represents legal grounds for their termination according to Article 56 paragraph 1 item 1 of this Law. International experience shows that political parties may themselves found associations or foundations, which in fact can promote their ideology and principles through their activities and their wider engagement (educational activities, seminars, conferences, research projects, etc.). However, an effort is made to maintain independence in the operation of these organisations in regard to daily and pragmatic political action. Article 4 The programmes and activity of citizen associations and foundations may not be directed at: - violent overthrow of the constitutional system of the Republic, - instigation and calling out to military aggression, and - excitement to national, racial or religious hatred and intolerance. According to the provisions of the Constitution (Article 20), the programmes and activities of citizen associations and foundations cannot be directed towards violent overthrow of the constitutional system of the Republic of Macedonia, instigation and calling out to military aggression, or exciting national, racial or religious hatred or intolerance. Also 5

6 prohibited are military or semi-military associations that do not belong to the armed forces of the Republic of Macedonia (Article 20, paragraphs 3 and 4, of the Constitution of the Republic of Macedonia). In case the programme or activities of a specific citizen association or foundation are nevertheless in contrary to these constitutional postulates, then the Constitutional Court shall determine with its decision what according to Article 52, paragraph 1 item 1 and Article 56 of this Law are the grounds for termination of the citizen association or foundation. Initiatives for the consistent implementation of the programmes and activities of citizen associations and foundations may be raised by anyone, by means of lodging a public complaint (actio popularis), i.e. in conformity with Article 56 paragraph 2 anyone may raise an initiative for termination of a citizen association or foundation if there is grounded suspicion that it implements activities in contrary to Article 20, paragraphs 3 and 4, of the Constitution of the Republic of Macedonia, and Articles 3 and 4 of this Law. The one to propose the start of the procedure at the primary court is the Public Prosecutor on whose territory is the seat of the respective citizen association or foundation (Article 58 paragraph 1 of this Law). Article 5 Citizen associations and foundations have a statute. Citizen associations and foundations are independent in the organisation and implementation of their goals, interests and activities determined by the statute. Citizen associations and foundations exercise their rights, duties and responsibilities conform to the Constitution, law and statute. The basic act of a citizen association or foundation is its statute. The Law gives only the framework for the basic contents of the statute (see Article 20 of this Law), whereby the independence is stressed of the organisation and activities (implementation of their statutory goals) of the citizen associations and foundations. Thus, the set-up of the organisation and activities remains at the disposition of the associations and foundations, whereby their rights, obligations and responsibilities are 6

7 settled within the framework of the principles of constitutionality and legality and in conformity with the provisions of their statutes. Article 6 Citizen associations and foundations are legal entities. Citizen associations and foundations, as well as their unions and other forms of association or linkage, attain the capacity of a legal entity from the day they are entered into the Register of Citizen Associations and Foundations (in the further text: the register). Citizen associations and foundations may not be transformed into other types of legal entities. Citizen associations and foundations have a legal individualism, which they attain on the day they are entered into the Court Register of Citizen Associations and Foundations. The legal individuality of citizen associations and foundations is of a lasting nature. In conformity with Article 6 of this Law, citizen associations and foundations cannot transform into other types of legal entities, i.e. into other types of legal persons (for example, into trade companies or political parties), because they would cease to exist. This prohibition should not concern the higher-developed types and forms of association (unions, etc.), as well as to the possibility for membership in foreign citizen associations and foundations. Also, this prohibition does not concern the transformation of one citizen association into a foundation, or vice versa, because regardless of the fact that the legal form is changed, the non-profit nature of this organisation is retained. Article 7 Citizen associations and foundations are accountable for their obligations with their property and assets. Citizen associations and foundations may not perform economic activities. Citizen associations and foundations may only found limited liability companies and shareholding companies for performing their goals, interests and 7

8 activities and for financing their functions determined by the statute. In agreement with their individuality, citizen associations and foundations are responsible for their liabilities with their property and assets. As a rule, citizen associations and foundations cannot perform economic activity, in conformity with the Law on Trade Companies. This general provision arises from the reasoning that citizen associations and foundations are founded primarily for the implementation of goals and interests of a different nature, which at the same time may have a market value, but this dimension is of secondary importance. On the other hand, paragraph 2 does not have an absolutely prohibitive action, because within the framework of the performing of their activities, it is permitted that citizen associations and foundations perform such economic activity which is appropriate and corresponds to the field of operation of that organisation. In essence, these organisations strive towards meeting those kinds of citizen needs that often cannot exist under normal market conditions. In this sense, the sale of goods and provision of services that fall within the scope of interest for activity by the organisation and which are undertaken in order to implement the statutory goals, are not interpreted as "economic activities". 2 For more details on the forms and types in establishing trading companies by citizen associations and foundations, see in the appendix to these comments. territorial principle. Article 8 Citizen associations and foundations are active and they are organised on a 2 One could quote the example in Anglo-Saxon countries where non-governmental organisations attain the status of charity, which is directly linked with tax relief. Concretely in connection with economic activities, a distinction is made between "trading with a primary goal" and "supplementary trading". The former is linked with the primary goal of the organisation or represents an economic activity that is exercised mainly by (for) the beneficiaries of the services of that organisation. If the statute foresees these activities, it is considered appropriate that the goods and services offered should be paid for. Supplementary economic activity may also contribute to the performing of the primary goal of the charity, and in the fiscal sense, this is treated as primary. In this sense, this category includes collection of donations or funds for the goals of the organisation, or a humanitarian concert, dance, sale of food and drinks, or souvenirs, within the framework of a museum (where the profit goes directly to the account of the organisation for its existence and operation), etc. Charity Commissioners for England and Wales, Charity and Trading (1996). 8

9 This Law determines the territorial principle as the basic principle of action and organisation of citizen associations and foundations. Maybe it was necessary to also foresee the functional principle for the implementation (organisation and action) of more developed types and forms of citizen association and foundations, but the legislator dwelled only upon the territorial principle, i.e. registration at the relevant registration court is done according to the location of the seat of the citizen association or foundation. Nevertheless, Article 72 of this Law leaves space for functional linking of citizen associations and foundations into other forms of linkages, which is of common interest for promoting the operation and activities, for harmonising special and common interests in the area in which they are founded, as well as for the implementation of other issues of common interest. Article 9 The operation of citizen associations and foundations is public. The statute of citizen associations and foundations determines the manner in which publicity in their operation is provided and implemented. In conformity with this Law, every citizen association and foundation is obligated to operate based on the principle of publicity. The operationalisation of this principle will be made according to the solutions to be provided by the statute of the citizen association or foundation. Article 10 Every citizen association and foundation has a name. Citizen associations and foundations may also use abbreviations of their name if this has been entered into the register. The name and the abbreviated name of the citizen association and foundation must be clearly distinct from the names of other citizen associations and foundations that are entered into the register. The citizen associations and foundations whose interests have been violated 9

10 by unjustified use of their name have the right to request termination of the use of their name and to claim compensation for the damages. Citizen associations and foundations must have a name. If the foundation act foresees this, and if this is registered in the court register, citizen associations and foundations may also use abbreviations of the name. On the other hand, the name and abbreviation of the association and foundation must be clearly different from the names of other citizen associations and foundations that have been entered into the register. Citizen associations and foundations have the right to request protection against unjustified use of their name, as well as compensation for damages from such unjustified use of their name. In the Republic of Macedonia at present there are several thousand citizen associations with a similar, and some with an identical name. At the time of registration in the court register, the court must watch out for Article 77 paragraph 2 of this Law, i.e. if the name of two or more citizen associations is repeated with the same signs and words, that citizen association retains its existing name which was registered first in the register of social organisations and citizen associations, which was maintained at the municipal body for internal affairs. If this cannot be determined, then the procedure for registration should be stopped, and the interested citizen associations should be referred to a trial, where the court shall determine the name of the citizen association in a regular proceeding. After the court sentence on this pre-judiciary issue, the relevant citizen association shall be entered into the register. Article 11 Expressions that mark the name of a state, its derivatives and its abbreviations, names of historical persons and places, may be placed as supplements in the names of citizen associations and foundations only if an approval was granted by the Ministry of Justice. At the time of entry into the register, the court shall watch out for expressions 10

11 that designate the name of a state, its derivatives and abbreviations, the name of historical persons and places, which can be placed as supplements to the name of the citizen associations and foundations, for which approval is sought from the Ministry of Justice. Thus, the approval from the Ministry of Justice becomes an obligatory document, necessary for the register, in conformity with Article 44 of the Law. Article 12 A citizen association may be entrusted with the performing of public authorisations. The public authorisation is entrusted by the appropriate ministry from the area of activity of the citizen association, in conformity with the Law. When issuing the public authorisation to a citizen association, the organ from paragraph 2 of this Article takes into consideration the following general criteria: - the nature and field of activity; - the professional goals of the citizen associations; - the need for the activity of the citizen association among the wider public and the use of their services; - an appropriate organisational capacity; and - the extent of experience in the field in which it is active. A citizen association may be deprived of performing a public authorisation because it abuses it and because it does not provide its performance. Besides plain citizen associations, this Law also foresees citizen associations with public authorisations. The goal of this provision is to enable the state to provide special status to organisations that are capable of providing services with wider social benefit. It is considered that the existence of such organisations relieves the load upon the state from the obligation to create additional administration, and thus enabling the system to function more efficiently. Namely, the competent ministry in the field in which the association is active entrusts the citizen association with the performing of public authorisations, in conformity with the general criteria; the nature and field of activity; the professional goals of the citizen 11

12 association; the wider public need for the activity provided by the citizen association and for the use of their services; appropriate organisational capacity (equipment, engaged professionals) and the extent of experience in the field in which it is active. With its own act (ruling), the competent ministry determines the criteria according to which the public authorisation is entrusted to the citizen association or foundation; in addition, the ruling should also give the conditions because of which the respective citizen association or foundation shall loose this status. The provisions from this Article must be applied respectively to the foundations, i.e. it should be foreseen that in conformity with the criteria, such status may also be entrusted to a foundation. This privilege (usually linked with fiscal and customs authorisations, utilisation of budgetary funds, etc.) for the performing of a public authorisation may be revoked because of abuse and non-performing of the activities for which the public authorisation was received. The legislator should have foreseen a penalty within the penal provisions for those citizen associations that abuse the status of an organisation with public authorisation, i.e. which abuse the performing of a public authorisation. conform to the Law. Article 13 A citizen association and foundation may use fiscal and customs reductions In conformity with the nature and goals for which people (citizen association) and assets (foundation) associate, given in Article 20 of the Constitution and Article 2 of this Law, citizen associations and foundations may enjoy tax and customs reductions. The level and manner of using tax and customs reductions shall be determined by the relevant fiscal and customs laws, as well as by the act for entrusting the performing of a public authorisation, passed by the competent ministry. II. CITIZEN ASSOCIATIONS 2.1. Founding a citizen association 12

13 Article 14 Citizens may found citizen associations in order to meet their own or common goals and interests. Citizens establish citizen associations in order to meet their personal or common goals and interests, given in Article 20 of the Constitution of the Republic of Macedonia and in Article 2 paragraph 1 of this Law. Article 15 The citizens as founders decide the type of association and the internal organisation of citizen associations at the founding assembly. The members of the citizen association decide about a change in the type of association and of the internal organisation of the association at an assembly. It has been left to the free choice of the citizens to decide about the type of association and the internal organisation of the association, which free choice they express as founders at the founding assembly. Also, it is decided in assembly on a change in the type of association, as well as about the internal organisation of the association. Article 16 Founders of a citizen association may be only citizens of legal age who have citizenship of the Republic of Macedonia. Persons whose business capacity has been revoked by a court decision that has come into effect may not be founders of citizen associations. Founders of a citizen association may only be citizens of legal age, who have citizenship of the Republic of Macedonia. Founders of an association cannot be persons whose business capacity has been revoked, i.e. persons who cannot appear independently in legal transactions. 13

14 Article 17 A citizen association may be founded by at least five citizens of legal age who have citizenship of the Republic of Macedonia. The legal minimum for the number of founders who can found a citizen association is five adult citizens, who have citizenship of the Republic of Macedonia. Citizenship of the Republic of Macedonia is proven by means of a certificate of citizenship, issued by the Ministry of Internal Affairs, or by an identity card (photocopy of the certificate of citizenship, or of the identity card). Article 18 A citizen association is founded at an assembly of founders, where the deed of foundation, programme and statute are enacted, and where its organs are elected. The citizen association is founded at a constitutional session of the assembly of founders, when the following constitutive acts and documents are enacted: deed of foundation, programme for the operation of the association, and statutes; and the association organs are elected. For more details about the listed acts and documents see the annex to these comments. Article 19 The deed of foundation of a citizen association particularly contains: - name, seat and address of the citizen association; - names, addresses and unique source identification numbers of the founders; - goals and tasks; and - name of the authorised person that shall present and represent it in legal transactions and towards third parties in public. The deed of foundation, as the basic constitutional act for the founding of the citizen association must contain: name, seat and address; names, addresses and unique source identification numbers of the founders; what are the goals and tasks of the 14

15 association (which must be in conformity with Article 20 of the Constitution and Article 2 paragraph 1 of this Law); and the name of the authorised person who will present and represent the newly founded association in legal transactions and towards third persons in public. As a rule, the president of the association is appointed as authorised person to present and represent the association, who besides presentation and representation should also execute the registration of the association in the court. The president may transfer this authorisation to one of the other founders, to a member of the assembly or to a member of the Executive Board. Article 20 The statute of a citizen association particularly contains: - name and seat of the citizen association; - goals and tasks of the citizen association, the forms and manner of operation; - organs, how they are elected and their responsibilities, and their mutual relationship; - term of office of the organs and how the members make decisions; - attaining and disposing over property; - providing publicity in its operation; - determining the conditions for establishing branches (organisational units); - conditions and manner of becoming a member of and being expelled from the citizen association; - presentation and representation in legal transactions and towards third persons; - termination of the citizen association; - handling the property of the citizen association in case of termination of the association; and - other issues determined by Law. The statute of the citizen association must be based and arise from the deed of foundation, especially in the part that concerns the goals and tasks of the association, which must be detailed in the statute. The Law foresees a number of elements that must be contained in the statute of 15

16 the association, but room is left open for the citizen association to regulate with their statute, independently and in more detail, the issues that are of interest for the implementation of their goals and tasks, or which correspond to the nature of the association itself. Forms for the statute of a plain citizen association, as well as a statute of a union (a more developed form of association of citizens, Article 72 of this Law) are provided in the annex to these comments Membership in a citizen association Article 21 A member of a citizen association may be any citizen who has citizenship of the Republic of Macedonia, who voluntarily becomes a member of the association in a manner determined by the statute. Foreign citizens may become members of a citizen association of the Republic of Macedonia if this is foreseen by the statute. Citizen associations guarantee the anonymity of personal data of members of the citizen association who have requested this. Members of specific associations (associations of drug, alcohol, and tobacco addicts, of ill with specific diseases) retain their anonymity. The Law insists upon the voluntary membership in citizen associations, which means that any citizen who has citizenship of the Republic of Macedonia may be a member of a citizen association, who of free will joins the association. In addition, if the statute of the relevant association foresees this, foreign citizens may also be members in that association. The citizen association is obligated to take care about the anonymity of the personal data of the members of the association, if they request this. An exception is made when this concerns members of specific associations (addicts to drugs, alcohol or tobacco, or ill with certain diseases), in the sense that they retain their anonymity. Article 22 16

17 Becoming a member of a citizen association is by means of a membership form, which it is compulsory to return in case of expulsion or termination of membership in the association. The citizen association maintains a register of membership on its members, which is updated once a year. The citizen association determines in its statute the shapes and forms of collective membership. Any member may resign voluntarily from a citizen association. The conditions and manner of expulsion from or termination of membership in a citizen association are determined by the statute. Any citizen who wants to become a member of a specific association does this with a membership form, which after his expulsion or termination of his membership must be returned to him. The Law foresees the obligation of every citizen association to maintain a register of its membership, which should be updated once a year, i.e. if the number of members of the association falls bellow what is foreseen in Article 17 of this Law, then Article 52 of this Law comes into effect, respectively the relevant association ceases to operate. Also, the legislator has left to the free discretion of the associations to determine the forms and types of collective membership by means of their statutes. The statute of the association determines the terms and conditions on expulsion or termination of membership in the relevant association Organs of citizen associations Article 23 Organs of a citizen association are: - assembly; and - executive organ. The statute of the citizen association may also foresee other organs. 17

18 The Law foresees the assembly and executive organ as obligatory organs that must be elected by each association. Article 63 of the Law foresees another obligatory organ, which should perform control over the purposeful utilisation of and disposition over funds and revenues of the citizen associations and foundations. Namely, the statute of the association must foresee an organ (regardless whether this is the supervisory board, supervisory committee, etc.), which would control the implementation of the provisions of the statute, as well as control over the financial operations of the relevant association. In addition, the statute also determines the composition, competence and manner of election of this organ, which as a rule, should be elected by the assembly or the executive organ. Thus, a special place in the statute must be dedicated to this supervisory organ, as an organ that acts within the framework of each citizen association. The legislator foresees that with the statute, each association may also foresee the establishment of other organs, as organs of the assembly and executive organ. This is expected to be the case with associations that have a larger number of members, or which have a larger scope of various activities, international co-operation, etc. Article 24 The assembly is the highest body of the citizen association, comprised of all members of the association. The statute of the citizen association may foresee that the assembly should be comprised of representatives of collective members, specific branches or other organisational units. The assembly from paragraph 2 of this Article is constituted by representatives whose number, term of office, manner of election and recalling are determined by the statute of the citizen association. In the case of smaller citizen associations, the assembly is usually comprised of all of its members. If the association establishes its assembly on a representative basis, then it determines with its statute the manner of election of representatives of its collective members, of individual branches or of organisational units. Thus, the association shall 18

19 determine with its statute exactly the number, mandate, manner of election and recall of representatives who comprise the assembly. This is especially foreseen for the more developed forms of association, foreseen in Article 72 of this Law. A form for the statute for this kind of an association can be found in the annex to these comments. Article 25 The assembly of the citizen association: - enacts the statute, programme and other acts; - adopts the annual report, guidelines and plan of operation; - adopts the final financial statement and financial plan; - decides about a change in the goal of the association; - decides about founding and terminating branches and other forms of organisation of the association; - decides about association or disassociation from another association and becoming a member in some other unions and international organisations; - determines admission of new members and termination of membership; - elects organs of the association; - decides about termination of the association with two-thirds majority; - decides also about other issues that are not under the competence of other bodies of the association; and - also performs other work in conformity with the statute and the general acts of the citizen association. The Law gives the principal framework competencies that should be foreseen by the statute for the operation of the assembly. In addition, space is left for each citizen association to foresee with its statute and general acts the performing of other matters by the assembly, as well, which are of interest for the implementation of the goals and tasks of the association. The legislator also foresees an assumed competence of the assembly, i.e. in order to stress the role and meaning of the assembly, it is foreseen that the assembly decides also on other issues, which are not under the competence of other bodies of the association. Only in the case of deciding on the termination of the association, the legislator foresees 19

20 that the assembly must make this decision with a two-thirds majority. For more details about the competence of the assembly, see the forms for statute provided in the annex to these comments. Article 26 A session of the assembly is convoked by the president of the assembly. A session of the assembly is convoked also upon proposal from the executive organ or of 1/5 of the total number of assembly members. If the president of the assembly does not convoke an assembly within 14 days from the submitted proposal, the session is convoked by the executive organ or the initiators. An assembly session about the operation of the executive organ can be convoked also upon proposal from the organ from Article 63 of this Law. The manner in which an assembly session is convoked is determined by statute of the association or by the rules of procedure. As a rule, a session of the assembly is convoked by the president of the assembly. If not otherwise determined by the statute or the rules of procedure for the operation of the assembly, a session of the assembly is also convoked upon proposal from the executive board or by one-fifth of the total number of assembly members. Thus, the statute and the rules of procedure must specify the minimal number of assembly members (1/5) who can demand the convoking of a session. This provision has a protective function, in case a conflict appears between the members of the association and its elected organs. If the president of the assembly does not convoke a session within 14 days from the day the proposal was given, the session is convoked by the executive organ or the initiators (minimum 1/5 of the total number of assembly members). In addition, in the case of evaluation of the performance of the executive organ, a session of the assembly may as well be convoked upon proposal of the supervisory board (supervisory committee), which in conformity with Article 63 of this Law performs control over the purposeful utilisation of and disposition over funds and revenues of the citizen association. 20

21 Article 27 The assembly can work if more than one half of the total number of members in it are in attendance, except if not otherwise determined by the statute. As a rule, the assembly passes its decisions by a majority of votes of the attendees. The statute defines in detail the issues for which it is necessary to qualify the majority for decision making. The legislator foresees that the assembly of the citizen association may work if more than one-half of its total number of members are present, except if not otherwise determined by the statute. Also, as a rule, the assembly makes decisions with a majority of votes of those present. The legislator foresees a qualified majority for decision making by the assembly only when this concerns the passing of a decision for termination of the citizen association, which the assembly must make with a two-thirds majority (Article 52, paragraph 1, item 1 of this Law). Except in the case of Article 52, paragraph 1, item 1, the legislator allows the citizen association discretion to determine in more detail other issues for which a qualified majority is required for decision making. Article 28 At the assembly, decisions are made by public vote, if the statute does not determine that specific issues are decided by secret vote. Each member of the assembly has the right to a single vote. As a rule, the assembly decides with public voting, unless the statute foresees secret voting for decision making on specific issues. For specific issues, the assembly may decide itself at its session that the voting can be secret. Every assembly member has the right to one vote. Article 29 21

22 The assembly elects an executive organ in which the majority of members have the citizenship of the Republic of Macedonia. A member of the executive organ is exempt from voting on issues linked with himself, his marital partner or a relative of the second degree, and about issues that concern some legal entity over which he has control or in which he has an economic interest. The legislator foresees as a second obligatory organ that each association must have the executive organ, which is elected by the assembly. The majority of the members of the executive board must be citizens of the Republic of Macedonia. The name of the executive organ may differ: executive board, presidency, board, management board, etc., and this has been left to the disposition of the association itself. The legislator foresees that a member of the executive organ is exempt from voting on issues linked with himself, his marital partner or relative to the second degree, and on issue which concern some legal entity over which he has control or in which he has an economic interest. In these cases, the member of the executive organ is exempt from voting upon his own initiative, or upon proposal from other members of the executive board, or upon proposal from a member of the relevant association. If it happens that the member of the executive organ is not exempt from voting, then this decision has formal omissions and by force of this Law is void. Detailed conditions and manner of exemption from voting for members of the executive organ are determined by the statute of the association or by decision of the executive organ. Besides this protective clause, it is clear that the decisions in the financial decision making of this body are expected to be made in conformity with the existing market conditions of the country, or are slightly more favouring, in conformity with the relevant adopted standards for organisations of this kind (non-governmental organisations). Article 30 The executive organ: - prepares the sessions of the assembly; - prepares the draft statute and other decisions that need to be enacted by the assembly; 22

23 - implements policy, conclusions and decisions that are passed by the assembly; - may form a professional service and control its operation; - manages and is accountable for the management of the property of the association; - prepares the annual or periodical report about its operation; and - performs also other work. The Law gives the basic framework competencies that need to be foreseen by the statutes for the operation of the executive organ. In addition, space is left for each citizen association to foresee with its statute and general acts also the performing of other matters by the executive organ, which are of interest for the implementation of the goals and tasks of the association. For more details about the competencies of the executive organ, see the forms of the statute provided in the annex to these comments. Article 31 The statute may also foresee the establishment of professional bodies and services, if a need for this arises from the implementation of the goals of the association. The field of work of the professional bodies and services from paragraph 1 of this Article is determined by the statute. The legislator foresees that each association may foresee with its statute the establishment of other professional bodies and services as organs of the assembly and the executive organ, if this arises from the needs to implement the goals of the association. As a rule, and in conformity with Article 30, paragraph 1, item 4, the executive organ establishes the professional service and performs control over its operation. This is expected to be the case with associations that have a more serious professional engagement in the field of action, and therefore have the need to establish appropriate services that implement the goals and tasks of the association with continuous work engagement. The rights and duties of the employees in the professional bodies and services are determined by the statute of the association, as well as by the decision for establishing these services that is passed by the assembly or the executive organ. The executive organ 23

24 approves the act that is passed by the professional service of the association. III. FOUNDATIONS 3.1. Founding foundations Article 32 A foundation is an estate made independent in the form of a legal entity, which is provided by one or more founders (donors) for the purpose of achieving specific goals. A foundation exercises its goals, rights, interests and beliefs for which it was founded by means of attaining and managing funds and property. A foundation may be founded with a money fund of at least DM 10,000 in denar counter value, according to the average exchange rate determined and published by the National Bank of the Republic of Macedonia on the day the deed is submitted for entry into the register. The legislator defines the foundation as an estate that is made independent as a legal entity and provided by one or more founders (donors), in order to achieve specific goals determined by Article 20 of the Constitution of the Republic of Macedonia and Article 2 of this Law. Thus, the foundation implements operationally its goals, rights, interests and beliefs by acquiring and management of funds and assets, in a manner determined by the statute of the foundation. The legal minimum for founding a foundation are funds to the amount of at least DM 10,000. The amount of the sum is determined in this way because it is considered that it would enable minimum conditions for initial operationalisation of the goals and tasks for which the foundation is established. This will also be used to evaluate the seriousness of the founders for investing funds for the achievement of the specifically determined goals set out in the statute of the foundation. The legal minimum of funds necessary for the founding of a foundation does not imply only cash, but it also implies the counter-value in money of 24

25 specific property rights, claims, etc. Article 33 A foundation is established by one or more founders. As a rule, a foundation is established for an undetermined period of time, or for a determined period of time until the goal determined by its statute is achieved. Founders of the foundation may be physical persons or legal entities. A foundation may also be established through a testament or a legacy, verified by a notary. A testament has the capacity of the deed of foundation from Article 35 of this Law. If the testator does not appoint an executor of the will, the executor is appointed by the primary court. Founders of the foundation may be one or more persons. Also, the foundation is founded for an undetermined period of time, or for a determined period of time until the goal determined by the statute is achieved. In case the statute does not specify a determined timeframe, it shall be considered that the foundation is founded for an undetermined period of time. The legislator allows legal entities to appear as founders, besides physical persons. The foundation may be founded also by a testament or legacy, verified by a notary. In this case, the testament has the character of a deed of foundation of the foundation, whose contents are foreseen by Article 35 of this Law. If the foundation is established with a testament, and the testator had not determined an executioner of the testament, in that case the executioner is determined by the primary court on whose territory the testament was made and the establishment of the foundation is foreseen. Article 34 In case when several persons are founders of a foundation, they exercise 25

26 their rights only jointly, unless otherwise determined by the deed of foundation of the foundation. Founding rights of the founders are not transferable to their legal heirs. The donors that appear after the establishment of the foundation do not attain the status of founder. Foreign legal entities and physical persons may also appear as founders of a foundation. The provisions from this Law regarding founding, registration and operation of a foundation shall also apply to foreign foundations. In the case when there are several persons as founders of the foundation, they enjoy their rights jointly, if not otherwise foreseen by the deed of foundation of the foundation. Also, the founding rights of the founders are not transferable to their legal heirs. As a rule, with the establishment of the foundation the founding rights of the founders disappear, in the sense that they cannot request a return of the deposited funds that are intended for the foundation. The aim of this provision is that funds invested in the founding (and operation) of the foundation must be intended exclusively for the goals and tasks for which the foundation was established. On the other hand, donors who grant own funds after establishment of the foundation do not attain the status of founders. Founders of the foundation may also be foreign legal entities and physical persons. In conformity with Article 69, paragraph 3 of this Law, the activity of such foundations may not be in contrary to the Constitution and laws of the Republic of Macedonia and to the international agreements, which the Republic of Macedonia has concluded or joined. The provisions on founding, registration and operation of the foundation from this Law shall apply also to the foundations where foreign legal entities and physical persons appear as founders. Article 35 A foundation is established with a deed of foundation. 26

27 The deed of foundation contains: - the name, seat and address of the foundation; - names, addresses and unique source identification numbers of the founders; - the goal for which the foundation was established; - money funds or other forms of assets expressed in money, which are the contribution of each founder separately and their origin; and - the names of the members of foundation organs. The deed of foundation must be signed by all founders and certified by a competent notary. The basic constitutive act for the establishment of a foundation is the deed of foundation. The Law foresees a number of elements, which the deed of foundation for the foundation must contain. The annex to these comments contains a form for the deed of foundation. Article 36 The founder may cancel or accept an amendment in the deed of foundation or in the statute up to the point when the foundation is registered in the Register of Foundations. If the foundation has more then one founder, the deed of foundation or the statute may be cancelled or supplemented only with the consent from all founders. If one or several of the founders withdraw, the other founders may supplement the deed of foundation or the statute only within the framework of the determined goals of the foundation. Even though the deed of foundation has been verified by the founder at a competent notary, the founder may revoke or amend the deed of foundation and the statute of the foundation, up to the point when the foundation is registered in the court register of foundations. This can happen upon suggestion either from the authorised registration judge or when during the procedure for founding the foundation, the founder wants to supplement the activity of the foundation with other goals and tasks or if he wants to revoke some of the 27