Law No. 122-05 on regulation and promotion of non-profit organization in the Dominican Republic
Law No. 122-05 on regulation and promotion of Non-Profit Organization
TABLE OF CONTENTS
I. Introduction
II. Background
III. Characteristics
IV. Classification
V. Incorporation Registry
VI. Bylaws
VII. Publicity Requirements
VIII. Foreign Nonprofit Organizations
IX. Qualification
X. National Center for Development and Promotion of Nonprofit Organizations
XI. Control Mechanisms
XII. Public Policies
XIII. Fiscal Regime
XIV. Dissolution XV. Transitional Provisions
I. INTRODUCTION
This Executive Summary recounts the Law No. 122-05 on the Regulation and Promotion of Nonprofit Organizations (hereinafter, the “Law 122-05) which revokes and replaces the Executive Order No. 520 dated as of July 26, 1920, as well as any other provision contrary to what is contained in such law. This summary is aimed at being an informative tool for the business community and the general public and as such, it addresses the most relevant aspects of Law 122-05. Non-profit institutions are very important for the strengthening and development of a pluralistic civil society, democratic and participatory, to facilitate the realization of the objectives concerning the public interest or the benefit to society as a whole.
II. BACKGROUND
One of the main obligations of the Government is the care of people with minimum economic resources in order to meet their basic needs, and in the fight against poverty. Understanding that to fulfill these tasks, the Government needs in addition to financial resources, the support from civil society organizations that may help maximize its initiatives they might have. As detailed before the importance of the nonprofit organizations playing a major role in our society, with this Law 122-05, provision of mechanisms to enable said institutions in order to coordinate their activities with the Government and to develop an support them, are established . Before the proclamation of the Law 122-05, incentives and benefits that the Government had established for non-profit associations or to those who supported them, through donations, was not sufficient. In addition, the tax treatment of such organizations was very fragile and it not had a sufficient legal support, since in how it was scattered in different local laws. Over the years, the growth of nonprofit organizations increased considerably in the Dominican Republic (hereinafter, the “DR”) and the available national budget resources were considerable. With a demanding of a more eff icient regulation and monitoring of the activities that these entities performed, to rule that appeared the Executive Order No. 520, dated as July 26, 1920. In that sense, it is of great interest to the Dominican State to encourage the creation, organization, operation and integration of nonprofit institutions, arising from the exercise of constitutional rights to free association, through a comprehensive legal framework to enable them to become legally incorporated and establish their self-regulatory mechanisms. Based on these principles and needs, the Government ratified Law 122-05 on the Regulation and Promotion of Nonprofit Associations in 2005.
III. CHARACTERISTICS
A nonprofit institution must have the following characteristics, namely:
a) An agreement between five or more persons or entities;
b) The purpose of developing or undertaking activities of social wellbeing or public interest;
c) Its activities must have lawful purposes, and,
d) They must not have the purpose or objective to obtain monetary or tangible benefits in cash to distribute among its members.
IV. CLASSIFICATION
The nonprofit association is classified as follows: a) Associations of public benefit or service to third parties, whose activities are designed to provide basic services for the benefit of society or this set of segments; b) Mutual benefit associations, whose activities are the primary mission promotion of development activities and rights of membership; c) Private partnerships, which carry out their activities to the nature of both sectors, public benefit and mutual benefit; and d) Interasociative Body of nonprofit associations, within this classification we have: consortia, networks and / or any other name of organization or multi-sectorial, comprising non-profit associations. Nevertheless, within the Public Benefit Institutions or Third Party Services Institutions and without limitation and without precluding the provision of any other service, there are:
a) Social Welfare Organizations;
b) Community Development Organizations;
c) Economic Development Organizations;
d) Technical Assistance Organizations;
e) Citizens Education Organizations;
f) Organizations that Support Vulnerable Groups;
g) Research and Broadcasting Organizations, and,
h) Civic Participation Organizations and Defense of Human Rights Organizations.
On the other hand, as Mutual Benefit Associations, which promote activities for development and defense of their members, they are:
a) Professional Associations;
b) Business Organizations;
c) Recreational Clubs;
d) Religious organizations; and,
e) Mutual Foundations and Associations.
Mixed Partnerships – They undertake activities of public and mutual benefit. Interrelating Bodies of Nonprofit Organizations – These require the involvement of three or more non-profit associations legally incorporated.
They are joint partnerships formed to improve the performance of the social purposes, and promote the public policies that assist in the development of their members.
V. INCORPORATION REGISTRY
In order to obtain a registration of incorporation for a nonprofit organization, the President of the association, through a formal request, must submit to the Attorney General’s Office of the judicial department of Santo Domingo, or the States Attorney’s Office of the Court of Appeals of the appropriate area (if the association will be located outside the Santo Domingo area), the following documents:
a) Minutes of the Incorporating Meeting;
b) Bylaws;
c) List of members with their corresponding general information (name, nationality, profession, marital status, number of identity card or passport, and address);
d) Mission and purpose of the organization;
e) Geographical area where its work shall be performed;
f) Registered address of the Organization, and,
g) A certification of the Ministry of Industry and Commerce, Department of Trade Names and Trade Marks, authorizing the use of its name.
The Attorney General’s Office or the State Attorney’s Office of the Court of Appeals must decide on such request within sixty (60) days of its submission. If no reply is received within that time, the interested parties may request the Attorney General’s Office or the State Attorney’s Office of the Court of Appeals to issue the incorporation registration within another fifteen (15) days. If this is not done, the nonprofit organization is deemed automatically registered.
The Attorney General’s Office must keep a national registry of all nonprofit organizations in the country.
However, all associations established by virtue of the laws of any foreign nation not concerning a pecuniary benefit, before settling in the Dominican Republic shall meet in front of the Attorney General’s Office to the Department of Santo Domingo or Judicial the Attorney General of the Court of Appeals for other certain requirements.
Nonetheless, religious institutions that are part of the Catholic Church, whether national or foreign, in addition to complying with all requirements of this Act, shall be authorized formally by the ecclesiastical authorities of that State.
In the event that a foreign organization wants to stop working in the Dominican Republic shall address a request to that effect, signed jointly by its president and secretary, to the Attorney General’s Office or the Attorney General of the Court of Appeal. It will be accompanied by a copy of the national newspaper published, so that the Attorney General’s Office or the Attorney General of the Court of Appeal will allow the cessation of the organization thirty (30) days after from the date of the said publication and until any pending legal action against such organization has been completed. The authorization shall cease to be subject to the same measures of advertising established in this law for the registration of incorporation.
VI. BYLAWS
The Bylaws of non-profit associations must contain the following: a) Name; b) Address; c) Mission and Purpose; d) Governing Bodies; e) Membership requirements and provisions on loss of membership; f) Rights and Duties of the members; g) Conditions and procedures for calling meetings of its members and its corresponding regulations; h) A statement giving the director, manager or president the capacity to request its incorporation; i) The statutory quorum for meetings, for both general meetings of members and board meetings, as well as the number of members that, in each case, have majority to decide; j) Designation of the officer authorized to represent the organization in court and to sign on its behalf all types of contracts; k) The term of the organization or an indication that it is indefinite; l) The rules governing equal rights among the members, without distinction of sex or age; m) Term of office of elected officers, renewal, re-appointment or reelection of directors; and, n) Rules that promote participatory democracy, and the adequate and transparent use of resources by the officers of the organization. VII. PUBLICITY REQUIREMENTS The publicity formalities established pursuant to Executive Order No. 520, were not repealed, and are still followed pursuant to this Law 122-05. Within one month of obtaining the registration of incorporation, in order for such registration to take effect, and the organization be considered a legal person, the applicant must: 1) File with the Secretariat of the Civil and Commercial Chamber of the First Instance Court and of the Peace Court, the following: (i) Certified copies of the incorporation registration; (ii) Original of the incorporation registration; (iii) A copy of the Bylaws, and, (iv) Other incorporation documents. 2) Publish, in a newspaper of national circulation, a summary of the incorporating documents, which must contain: (i) Name and address of the organization; (ii) Indication of the purpose to which it is dedicated; (iii) Names of founding members; (iv) Officers who, pursuant to the Bylaws, represent it before third parties; (v) Duration of the organization, and, (vi) Number of officers in the Board.