Nonprofit Organizations Law and Policy Third Edition - Libraries ...

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52 OVERVIEW OF THE NONPROFIT SECTOR CH. 1 NOTES 1. An example of the expanding role of nonprofit organizations in former Communist countries is the Act on Organizing and Conducting Cultural Activities enacted in Poland in 1991 to define methods and procedures for establishing cultural (national, state-owned and community-owned institutions).21 The Act provided that supreme and central governmental administrative agencies and voivods (district or provincial governments) could establish cultural institutions, such as theaters, museums, cinemas, libraries, and art galleries. A local community or a community union could establish community-owned cultural institutions for which cultural activities constitute the primary goals under their charters.22 The deed to establish a cultural institution was issued by its founder (the entity that forms the cultural institution). The founder provided the cultural institution with the necessary means to commence and carry out cultural activities and to maintain premises where the activities were conducted. The Act conferred the status of incorporation on cultural institutions as of the date of their entry in the register maintained by the founder. Founders could include local communities and community unions, and supreme and central government administrative agencies. 23 Donations to cultural institutions were exempted from the income tax basis. 2. An example of a progressive NGO law in an Arab country was a law enacted in Yemen in 2001 related to associations and foundations. 24 The law improved the legal framework for NGOs by simplifying the procedures for establishing them. Foreign associations and foundations could register offices in Yemen. 3. The United Kingdom encourages philanthropy through the voluntary sector and by private public partnerships (PPPs). The concept of the PPP is that private enterprise should invest in major projects carried out by public entities. A. SYNOPSIS OF FRENCH LAW ON NON-PROFIT ORGANIZATIONS Consider the laws in France relating to nonprofits from the following summary of French laws on nonprofit associations and foundations prepared by Salli Swartz,25 an attorney who practices in Paris. 1. Associations The laws of June 14 and 17, of 1791, enacted during the French Revolution (and which were called the laws "Le Chapelier) prohibited 21. Discussion by Teresa Drozdowska, "Legal Foundations for Protection of Cultural Property in Poland," Chapter 17 in Law of Cultural Property, Marilyn Phelan, Gary Edson, and Kimberly Mayfield, eds., Kalos Kapp Press, 1998. 22. See Articles 2,8-10, and 18-20, Section 1, Journal of Laws No. 60/91, Item 253. 23. Id., Articles 8 and 9. Article 21, Section 1 of the Act permits founders such as voivods and supreme and central government administrative agencies to establish cultural institutions pursuant to agreements with natural persons, legal persons, or unincorporated organizational entities. 24. Law No.1 for the Year 2001, Feb., 2001. 25. Salli Anne Swartz, Phillips, Giraud, Naud & Swartz, Avocats a la Cour, Paris, France. Ms. Swartz would like to thank Marie Pierre Gay, Avocat a la Cour, for her contribution and assistance in preparing this synopsis.
SEC. IV FOREIGN NONPROFIT ORGANIZATIONS 53 ----------------- individuals from forming groups to defend their "alleged mutual interests." In furtherance of this prohibition, Articles 291-294 of the Napoleonic Code created and punished the crime of association. Al though Article 8 of the Constitution of 1848 recognized the right to associate, it did not repeal the Articles of the Napoleonic Code. This situation remained until the enactment of the law of July 1, 1901 (the "Association Law") which created the right to form groups or associations. The Association Law created a right to create associations, but it did not create a legal entity specific to associations. Article 1 of the Association Law defines an association as an agreement by which two or more persons mutually and permanently make available to themselves their knowledge and activities for a purpose other than making profit. To be construed as an association under French law, the group of persons must be independent and the association must be created permanently and indefinitely. Groups that are created for the sole purpose of promoting one event, or to lobby for a particular mission, are not considered to be an association under French law and case law. An association, which can take the form of a mere agreement between two or more persons, does not have to be publicly registered with the authorities. However, if an association is declared and registered with the authorities, it will benefit from the attributes of a legal entity. To register an association, the association must have by-laws drafted in accordance with the Association Law and certain written formalities must be carried out with the local police and administrative authorities (the "Prefecture") at the place of the association's registered office. There is a distinction under French law between an association and a foundation: the purpose of an association is to permit a group of persons to pursue a common objective for non profit reasons, whereas pursuant to the Law nE 87-571 of July 23, 1987, the purpose of a foundation is to receive assets irrevocably for the furtherance of the goal of the foundation. A foundation does not have members. The legal concept of a trust does not exist under French law. Consequently, there is no such entity as a charitable trust in France. There are several different types of nonprofit associations in France, such as public interest associations and associations which are subject to administrative approval. A public interest association is one which meets two criteria: first it must have a general public interest mission as its goal, such as sports federations, a musical orchestra, tourism, education and culture, and second, it must allow for administrative oversight to assure that the association is furthering its purpose. There is no fixed manner in which this latter criteria must be met, but the by-laws must provide for some oversight mechanism, for example, the appointment of governmental representatives to the board of directors.
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