Non-Profit Organizations (NGOs): Registration & Operation
- Avocat
- Mar 18
- 7 min read
In Romania, individuals and legal entities wishing to engage in activities of general interest, community interest, or non-material personal interest have the opportunity to establish associations and foundations in accordance with Government Ordinance no. 26/2000. These legal structures are essential for organizing and promoting various social, educational, cultural, humanitarian, or professional initiatives.
Find out from this article about:
1. Non-profit Associations (NGOs): Expression of a Constitutional Right
1.1. What is the right to free association?
The exercise of the freedom of association refers to the ability of any individual or legal entity to freely join or form groups, organizations, or gatherings without interference or coercion. This fundamental right is guaranteed by both the Constitution of Romania and the international treaties to which Romania is a party, including the European Convention on Human Rights.
In Romania, the freedom of association is protected under Article 40 of the Constitution, which states that citizens are free to associate in political parties, trade unions, associations, foundations, or other forms of organization. Furthermore, Government Ordinance no. 26/2000 regulates the establishment, organization, and operation of non-governemental organizations (NGOs) and foundations, providing a clear legal framework for their activities.
1.2. What does the right to free association involve?
The right to free association involves:
The freedom to form associations and organizations – any individual can initiate and register an association or foundation, complying with the legal requirements.
The freedom to join and withdraw – no one can be forced to be part of an association against their will, and they also have the right to withdraw at any time.
The right to autonomy – associations and foundations can establish their own organizational rules, in accordance with the law and without unjustified interference from the state.
1.3. Limitations of the right to free association
Although the freedom of association is a fundamental right, it is not absolute. The government may impose restrictions if they are necessary to protect public order, national security, health, or the rights of others. For example, NGOs with illegal purposes, promoting violence, discrimination, or other unlawful actions are prohibited under the Romanian legal framework.
1.4. What does general, collective, or non-material personal interest mean? Establishing a NGO.
General interest refers to activities that impact the entire society, aiming to improve the living conditions for as many people as possible. These activities include environmental protection, promotion of human rights, and support for education and public health. Such initiatives contribute to social and economic progress and are essential for the development of a balanced society.
Collective interest targets specific groups, such as local communities, vulnerable categories, or professional groups. For example, there can be associations dedicated to supporting children, the elderly, or people with disabilities, offering them services and support tailored to their needs. Also, certain organizations are created to represent the interests of particular professions or fields of activity, facilitating knowledge exchange and promoting best practices.
Non-material personal interest includes situations where the members of an association pursue a common goal without seeking profit. These initiatives might be focused on promoting hobbies, supporting scientific research, or protecting certain rights and common interests. NGOs of this type allow individuals with similar concerns to collaborate and develop activities in an organized framework, thus strengthening the community they are part of.
2. How to Establish a Non-Profit Organization (NGO)
2.1. General requirements for establishing a non-profit association (NGO)
A non-profit association (NGO) is a private legal entity formed by the agreement of at least three people, with the purpose of carrying out activities of general interest, community interest, or non-material personal interest for its members. To establish a non-profit association (NGO) in Romania, the following main conditions must be met:
Minimum number of founding members
There must be at least three individuals or legal entities. Among the founding members, there must be an agreement regarding the associative structure and the way the non-profit association (NGO) will act. This agreement will form the statutes of the non-profit association (order articles of incorporation).
Non-material purpose
The NGO cannot aim to obtain profit for its members. Unlike commercial companies, which are established to make profit, associations (NGOs) promote general community interests.
Initial capital
As with limited liability companies (SRLs), non-profit associations have an initial capital contributed by the founding members according to the statutes. The initial assets consist of contributions in cash and/or in-kind, such as real estate. If the contribution is in-kind, the authentic form of the statute is mandatory.
Headquarters
The newly established non-profit association (NGO) must have a registered office, which can either be in a personal property of one of the founders or in a property used under a lease or free use contract, with the property owner's consent.
Articles of incorporation
This document is similar to the articles of incroporation of limited liability companies and must be drafted and signed by the founding members.
2.2. Steps for establishing a non-profit association (NGO)
Choosing and reserving the name: The first step is to check and reserve the name of the future non-profit association with the Ministry of Justice (not the National Trade Registry Office as with SRLs). To do this, you must complete an application for name availability check and pay the relevant administrative fee.
Drafting the NGO's articles of incorporation: The articles of incorporation must include essential information such as:
Name and headquarters of the NGO
Purpose and objectives of the NGO
Organizational structure and responsibilities of governing bodies
Rights and obligations of the members
Rules regarding the assets and their management
Opening a bank account and depositing the initial capital: The future NGO must open a bank account.
Submitting the file to the competent court: The file must be submitted to the court in whose jurisdiction the association's headquarters is located. The file should include:
Application for registration
Statutes of the non-profit association
Proof of the registered office
Proof of initial capital
Proof of name reservation
Copies of the ID cards of the founding members and their affidavit
Court decision: The court in the jurisdiction of the non-profit association's headquarters is responsible for checking the establishment documents and issuing an approval or rejection decision.
Obtaining the registration certificate and fiscal registration: After the establishment request is accepted, the non-profit association will receive its registration certificate and must then obtain a fiscal identification code from the National Agency for Fiscal Administration (ANAF).
2.3. Entities different from non-profit associations (NGOs)
Political parties, trade unions, and religious cults are distinct legal entities and are not governed by Government Ordinance no. 26/2000 on associations and foundations. These organizations are regulated by specific laws that establish the particular conditions for their establishment, organization, and operation, and they have a different legal status than associations and foundations.
Political parties are regulated by the Political Parties Law no. 14/2003, primarily aimed at participation in political life and influencing decision-making at both the national and local levels. They operate based on their own statutes and must comply with strict rules on financing, transparency, and internal organization. Unlike associations and foundations, political parties can receive subsidies from the state budget and participate in elections to gain representation in public institutions.
Trade unions are regulated by the Social Dialogue Law no. 367/2022 and focus on defending the professional, economic, and social rights and interests of their members. They can negotiate collective labor contracts, organize protests and strikes, and play a significant role in representing employees in relation to employers and public authorities.
Religious cults are regulated by Law no. 489/2006 on religious freedom and the general regime of cults. These entities are organized around a religious belief and have the right to carry out religious activities, religious education, and spiritual assistance. Unlike associations and foundations, religious cults can receive financial support from the state and have a distinct legal status recognized through a separate procedure.
3. Operation of a Non-profit Association (NGO) After Establishment
3.1. Legal obligations
After establishment, an association must comply with a series of legal and administrative obligations to ensure proper operation and adherence to the applicable legislation. These obligations are crucial for maintaining the association's legal status, avoiding sanctions, and enhancing credibility in front of authorities and partners.
Filing tax and accounting declarations: Once the NGO is registered, it must fulfill its tax and accounting obligations. Even though the primary purpose of the association is not to generate profit, it may carry out secondary economic activities that must be recorded in the accounting and reported to tax authorities.
Compliance with economic activity regulations: Although NGOs are not commercial entities, they may carry out secondary economic activities to support their objectives. These activities must be included in the statutes of the association and must be directly linked to the main purpose of the organization. Revenues from such activities cannot be distributed among members but must be reinvested in the association's activities.
Transparency and reporting regulations: NGOs are required to ensure transparency in managing funds and activities. This involves drafting and publishing annual activity reports that include information about funding sources, expenses, and activities carried out. Some associations, especially those receiving public funding or significant donations, are subject to strict reporting and auditing requirements.
3.2. Activities of non-profit organizations (NGOs)
In carrying out their activities, NGOs may enter into various types of legal contracts with contractual partners, either individuals or other organizations. These contracts govern the legal relationships between the parties involved and ensure the transparency and legality of the collaborations. Among the most common types of contracts entered into by non-profit associations are:
Sponsorship and partnership contracts: NGOs can sign sponsorship contracts with companies or other entities that wish to support a particular project or activity financially.
Service contracts: Associations can enter into contracts with service providers to outsource certain activities necessary for their projects.
Collaboration agreements: NGOs can sign collaboration agreements with other organizations or institutions to implement joint projects or activities.
Volunteering contracts: Though not considered salaried work, volunteer activity is regulated through specific contracts that establish the rights and obligations of volunteers.
Funding contracts: For project implementation, NGOs can enter into contracts with funders such as public institutions, international organizations, or grant agencies. These contracts regulate the terms under which the funds will be allocated and used, as well as project progress reporting.
Comentarios