What is NPO? The concept is interpreted as a non-profit organization. Let's analyze the question in more detail.
Concept and signs
Federal nonprofit law clearly interprets this abbreviation. These are institutions that are not created to profit from the activities of the company. They should be organized for specific documented purposes.
Goals and Activities of NGOs
They are different:
- Social.
- Charity.
- Health and environmental protection.
- Development and support of sports.
- Protection of the legal interests of citizens.
- Satisfying spiritual needs.
- The development of architecture, culture, art, etc.
Briefly, the question “What is NPO?” Can be answered in a nutshell: these are organizations that are not created for the enrichment of their participants or organizers.
First feature
Mandatory legal status. In this regard, such companies have organizational unity, hierarchical structure, name, logo, seal and other attributes, according to the status and constituent documents.
The latter, given the rules of the Civil Code, are divided into three types:
- Charter.
- Memorandum of association.
- General provisions on organizations of this type.
The second feature is independent property liability
Hence the key rule of such organizations - the founders of NPOs do not bear personal financial obligations for its activities. Let's analyze this moment in more detail.
Creating an IP, a citizen also establishes a legal entity. Suppose he was fined or needed a certain amount to creditors, but the company has no money at the box office. Then the organizer of the IP from his own pocket must pay for the company. This is called personal liability.
In the case of NPOs, this is not. A citizen who participated in the creation of the organization is not personally liable. If there is not enough money for obligations, then even through a court it is impossible to withdraw them from the founder. He risks only his share of the authorized capital, which he invested in the creation of NPOs.
Of course, the main responsibility for the activities of the organization lies with officials. Violations of NPOs result in a fine in their name. But the founders themselves do not incur financial losses.
The third feature is the isolation of property
This means that NPOs have certain movable or immovable property. Of course, this also happens in state or municipal enterprises. But unlike, for example, a charitable foundation, they cannot dispose of it (to donate, sell, etc.). This is the concept of separate property: the things of the founders do not belong to the organization, and vice versa. An exception is operational management, according to the Civil Code.
But, answering the question of what NPOs are, one cannot affirm their identity with enterprises that are not entitled to profit at all. This is not true. Such legal entities may, in addition to cultural, educational or charitable activities, engage in, for example, trade, or other other activities for profit. The only difference is that the margin from such activities should not go to the founders. All received income goes completely for the purpose for which they created the organization.
We give an example. There are social NGOs, such as charitable foundations. One of the goals of their creation is to help low-income groups of the population. It can be different. Legal, educational, material.But this does not mean that a charity fund does not have the right, for example, to open a trading shop selling souvenirs and make profit from such activities. Federal law on non-profit organizations allows this. The only moment is that all proceeds should go towards the goals of NPOs. In this case, this is material assistance to low-income people.
If money from trading activities is distributed among the founders, then it will be illegal. Perpetrators, in particular managers, will be held liable for misuse of funds or for fraud. But trade itself is not prohibited for NPOs.
Fourth Feature - Empowerment
This means that such entities are independent. They are entitled to act as plaintiff and defendant in court, to acquire and sell property, to organize controlled enterprises, even to create other NGOs on their own behalf. In other words, they are completely independent of their founders.
Location
As with any other legal entity, non-profit organizations are determined at the place of state registration. As a rule, this is where the permanent body is located. If there is none, then the location will be considered to be another body that can act without a power of attorney on behalf of the NPO.
Conclusion
So, now it’s clear what NPO is. This is a special organization in legal status, the activities of which are regulated by a separate law. Its objectives are defined in constituent documents. These do not include profit from activities for founders. The latter do not affect either the legal or commercial activities of NPOs. Also, they are not financially responsible for its activities and bear risks only in relation to their share of the authorized capital.
