The Legal Construction of the Nonprofit Legal Person
A legal person is an organised formation created to achieve a defined purpose, possessing its own property, independently liable with that property, acquiring rights and obligations in its own name, entering into transactions and capable of appearing in court as claimant and defendant. A legal person may be corporatively organised, founded on membership, dependent on the status of its members or independent of them, and may or may not pursue entrepreneurship. The law draws a line here: a legal person whose purpose is commercial activity is created under the law on entrepreneurs, while a legal person whose purpose is non-commercial activity must be registered under the procedure established by the Civil Code. Public-law legal persons, and the state and municipality themselves, participate in civil-law relations just like private-law legal persons.
Name and Registration
A nonprofit legal person has a name in which its belonging to the non-commercial form is indicated. The name may not use graphic symbols lacking a phonetic or verbal equivalent under linguistic norms, nor designations characteristic of other legal forms; it may not carry an addition capable of misleading a third party as to the form or activity of the entity, and it may not coincide with the name of an already registered nonprofit legal person. Registration takes place in the registry of entrepreneurs and nonprofit legal persons, kept by the National Agency of the Public Registry; a branch of a foreign nonprofit legal person is registered in the same registry. In practice these technical matters often become grounds for unfounded rejection, so the choice of the name and the preparation of the documents must be provided for in advance.
State Control and the Alienation of Property
The suspension or prohibition of the activity of a nonprofit legal person is decided by a court in the cases and by the procedure defined by law; where the organisation has substantially moved to commercial activity, the court examines suspension or prohibition on the basis of a claim by the registering organ or an interested person, and after a decision prohibiting the activity the registering organ cancels the registration. The freedom to alienate property is also constrained: alienation is possible where it serves the activity of the organisation, its organisational development, promotes the achievement of its aims or serves charitable purposes — property is thus tied to the statutory purpose and cannot be used for personal benefit.