Forming a charitable foundation in Georgia serves noble causes and requires proper legal organization to ensure the foundation can smoothly attract donations and assist beneficiaries. From a legal perspective, a charitable foundation is registered as a Non-Entrepreneurial (Non-Commercial) Legal Entity (NNLE). Its primary purpose is to accumulate assets and distribute them for socially beneficial goals, such as assisting the socially vulnerable, or promoting healthcare, education, or culture. The foundation structure allows for the creation of a transparent mechanism that builds trust among donors and ensures funds are spent as intended.
It is important to distinguish between registering the foundation as an entity and obtaining "Charitable Organization" status. The first step involves establishing the legal entity, while subsequently, if certain criteria are met, one can apply for special tax status which provides additional benefits.
What does the Charitable Foundation Formation service cover?
Specialists on Legal.ge offer full legal services for creating a charitable foundation:
- Preparation of founding documentation: Drafting a charter that clearly outlines charitable goals, sources of asset formation (donations, grants), and rules for fund distribution.
- Establishing a governance structure: For a foundation, having a supervisory or board of trustees to oversee the director and financial spending is vital. Lawyers will help you properly define and staff this structure.
- Registration at the Public Registry: Handling all necessary procedures at the Public Service Hall to register the organization.
- Regulation of charitable programs: Developing internal documents defining beneficiary selection criteria and aid distribution procedures, which is essential for transparency.
- Tax consultation: Providing information on the taxation of donations and prospects for obtaining charitable status in the future.
When is this service needed? (Practical scenarios)
Charitable foundations are created in response to various needs:
- Medical Aid Foundation: Created to fund treatment costs for patients with severe illnesses, where the foundation collects targeted donations.
- Disaster Relief Foundation: Established for operational assistance to populations affected during specific crises.
- Child Care Foundation: An organization working to support orphanages or promote inclusive education.
- Corporate Charitable Foundation: A large company establishes a foundation to give a systematic form to its social projects.
Georgian Legislation and Regulations
The legal basis for a charitable foundation is the Civil Code of Georgia, which regulates the creation of NNLEs. Particularly important is the Tax Code of Georgia (Article 32), which defines the concept of charitable activity and conditions for granting charitable organization status. Legislation strictly separates charitable activity from commercial activity and establishes that the foundation's assets cannot be distributed among founders but must be used solely for statutory purposes.
The process with a Legal.ge specialist
The process begins with a consultation where the lawyer learns about your charitable idea. Following this, a draft charter is prepared, taking into account your specific requirements (e.g., donor participation in management). With the specialist's help, documents are notarized (if necessary) and registered. After registration, the lawyer will provide recommendations on opening a bank account and maintaining initial documentation so that the foundation is ready to receive donations in full compliance with the law.
Why choose Legal.ge?
The success of a charitable foundation is based on trust, and trust begins with a sound legal structure. On Legal.ge, you will find specialists who understand the nuances of the NGO sector and will help you create a foundation that is transparent, law-abiding, and attractive to donors. Start doing good with professional support.
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