The Legal Foundation of an Advocacy Organization
An organization carrying human-rights or advocacy purposes is created in Georgia in the form of a non-entrepreneurial (non-commercial) legal entity. Article 24 of the Civil Code defines a legal entity as an organized formation created to achieve a defined purpose, possessing its own property, independently liable with that property, acquiring rights and duties in its own name, entering into transactions and capable of appearing in court as plaintiff and defendant. A legal entity may be corporatively organized, based on membership, dependent on or independent of the status of its members. A legal entity whose purpose is non-commercial activity must be registered in the manner established by the Civil Code, and it is precisely this route that forms the legal framework for founding an advocacy organization. The non-commercial form fits the task exactly: it allows a group to act lawfully in defence of the public interest, to acquire property, to conclude contracts and to defend in court both its own interests and, for the purpose of protecting rights, the interests of the persons who apply to it.
Registration Conditions and Founding Documentation
Article 29 of the Civil Code regulates the registration of a non-entrepreneurial legal entity: the interested person submits to the registering organ a partners' agreement and an application which must contain the mandatory data required for the registration of an entrepreneurial legal entity. The founding documentation must indicate the purpose of the organization's activity — for a rights-protection organization, the tasks of protecting human rights, representing them and exercising public oversight — the rules of admission to membership, exit and expulsion if the organization is membership-based, the organ taking decisions on reorganization or liquidation together with the decision-making procedure, as well as the manner of election of the governing organ and the term of its authority. Together with the registration, the registering organ creates the electronic address of the organization within the unified electronic portal, and the organization may register a telephone number or an e-mail address for electronic notifications, the sending of which is deemed delivery to the relevant person. The quality of the founding documentation is decisive here: a vague purpose or an unregulated structure breeds disputes later and complicates relations with donors.
Management and Representation
Under article 35 of the Code, the founder or member of a non-entrepreneurial legal entity may confer on one person the authority to manage the affairs alone, or establish the joint management or representation of two or more persons. Managerial authority means taking decisions in the name of the organization, while representative authority means acting in its name vis-a-vis third parties; unless the registration documentation provides otherwise, managerial authority implies representative authority as well. The organizational structure must be regulated by the charter — the agreement of the founders or members — which requires due notarization. The general rules established for a person holding representative authority of an entrepreneur extend to the commencement and termination of these authorities, and the requirements concerning business letters and websites also apply to the organization. The choice of joint management is often justified where control over decisions and an internal balance are needed.
The Boundaries of Alienating Property
For the financial sustainability of a rights-protection organization the rule of article 36 of the Code matters: the alienation of property owned by a non-entrepreneurial legal entity is possible where the alienation serves its activity, its organizational development, facilitates the achievement of its purposes or serves charitable aims. This wording ties the realization of assets to the non-commercial spirit: property may be alienated only in the service of the mission and not as a channel for the distribution of profit. In the eyes of auditors, donors and partners it is precisely this fidelity that gives the non-commercial status its weight and credibility.
Frequently Asked Questions
In which form is a rights-protection organization created?
In the form of a non-entrepreneurial (non-commercial) legal entity, in the manner established by the Civil Code; an organization with a commercial purpose must be created under the Law on Entrepreneurs.
What must the founding documentation contain?
The purpose of the activity, the rules of admission to, exit from and expulsion from membership, the organ deciding on reorganization or liquidation with its procedure, and the manner of election and term of authority of the governing organ — this list is established directly by the Code.
Can representation be conferred on a single person?
Yes. The founder or member may confer sole management on one person or establish the joint management of two or more persons; managerial authority implies representative authority unless the documentation provides otherwise.
When may the organization's property be alienated?
Where the alienation serves its activity, its organizational development, the achievement of its purposes or charitable aims.
How We Help on Legal.ge
The team of Legal.ge will assist at every stage of founding a rights-protection organization: we will formulate the purposes in a way that facilitates registration, prepare the partners' agreement and the application, design the structure of management and representation and think through the rules of property governance; we will also advise membership and expulsion procedures that do not breed conflict. Contact us — a foundation laid correctly from the start does not require revision for years.