Foundation Registration

Introduction

Foundations are nonprofit legal entities established to achieve public or private goals. This legal form offers flexibility and opportunities for financing long-term projects and initiatives. In Bulgaria, the registration of foundations is primarily governed by the Nonprofit Legal Entities Act (NPLEA).

Legal Framework

Key Legislation

Nonprofit Legal Entities Act (NPLEA): Regulates the establishment, registration, and operation of foundations.
Civil Procedure Code (CPC): Governs court registration procedures for nonprofit entities.
Tax Legislation: Foundations engaging in public-benefit activities may qualify for tax exemptions.

Types of Foundations

Public-Benefit Foundations: Focused on achieving objectives of public interest, such as education, healthcare, or environmental protection.
Private-Benefit Foundations: Established to serve the interests of a specific group of individuals or entities.

Registration Procedure

Step 1: Preparation of Incorporation Documents

Deed of Incorporation or Will:
- Defines the objectives, structure, and management of the foundation.
- Includes the foundation’s name, registered address, and initial capital.
Bylaws (Statutes):
- A mandatory document outlining the foundation’s purpose, governance structure, and procedures for fund allocation.
Minutes of the Founding Meeting:
- Documents the decisions to establish the foundation, adopt the bylaws, and elect governing bodies.

Step 2: Court Registration

Filing the Application:
- The application is submitted to the District Court where the foundation’s registered office is located.
Required Documents:
- Deed of Incorporation or Will.
- Bylaws.
- Minutes of the Founding Meeting.
- Proof of initial capital (if applicable).
- Paid registration fee.
Court Decision:
- The court reviews the documentation and issues a decision for the foundation’s registration in the nonprofit legal entities register.

Management Bodies

Board of Directors:
- The primary governing body responsible for the foundation’s activities.
Supervisory Board (Optional):
- Recommended for larger foundations to oversee financial and operational activities.
Executive Director:
- Responsible for day-to-day management, if outlined in the bylaws.

Financial and Tax Considerations

Funding Sources

Donations: The primary revenue source for foundations.
Grants: Funds from national or international programs.
Commercial Activities: Permitted if related to the foundation’s main goals, with proceeds reinvested into its mission.

Tax Benefits

Tax Exemptions: Public-benefit foundations may be exempt from corporate tax.
Donor Incentives: Individuals and legal entities making donations to foundations may qualify for tax deductions.

Challenges in Registration

Complex Documentation: Missing or incorrect details in the incorporation documents may result in a registration denial.
Undefined Objectives: Vaguely defined goals can hinder the registration or operation of the foundation.
Administrative Procedures: Lengthy processes may delay the foundation’s official recognition.

Practical Tips

Seek Legal Assistance: Legal consultants can streamline the process and ensure compliance with requirements.
Clearly Define Objectives: Ensure that the bylaws are comprehensive and accurately reflect the foundation’s goals and structure.
Plan for Financial Sustainability: Identify stable funding sources to support the foundation’s activities.

Conclusion

Foundation registration in Bulgaria requires careful preparation and adherence to the legal framework. Successful registration provides the foundation with legal status and the ability to pursue its objectives effectively. With strategic planning and professional support, foundations can play a pivotal role in society, contributing to development and well-being.

For assistance with foundation registration, you can consult a legal expert to prepare the necessary documents and facilitate the registration process.