HAP LLC

HAP LLC

hap.amhap.amhap.am
Region Area

News and developments

(Q&A) on Foundations

Disclaimer: The information provided in this Q&A is accurate as of March 20, 2024, and is intended for general informational purposes only. It is not intended as legal advice and should not be relied upon as such.

For personalized legal advice tailored to your specific situation, please contact us. Our team can provide you with the latest information and legal insights to help you navigate the complexities of foundations. 

  • What is a foundation according to Armenian legislation?

    • According to the RA Civil Code (hereinafter also referred to as the “Code”) and RA Law on Foundations (hereinafter also referred to as the “Law”):

    Foundation is a non-commercial organization, which is established based on voluntary contributions of property on behalf of citizens and (or) legal persons, and which does not have members and pursues social, charitable, cultural, educational, scientific, public health, environmental or other public benefit goals.

    The foundation, in its own name, may acquire and exercise property and personal non-property rights, bear duties, and be a plaintiff and a defendant in the court. The foundation has the right to open bank accounts in the Republic of Armenia and in the banks of foreign countries in Armenian Drams and (or) foreign currency.

  • Who are the beneficiaries of the foundation?

    • The beneficiaries of foundations are natural and legal persons, for whose benefit , in accordance with the foundation’s charter, certain payments can be made or have been made, services can be or have been provided or some part of the foundation’s property can be or has been transferred.

  • Is the foundation allowed to participate in entrepreneurial activities in Armenia?

    • The foundation may carry out entrepreneurial activities only in those cases, when it serves for the accomplishment of goals for which it has been created and corresponds to these goals. The foundation may carry out entrepreneurial activities directly, or it may create commercial organizations or participate in them. The foundation has the right to carry out only in the types of entrepreneurial activities provided for by its charter.

  • Who can be the founders of a foundation according to Armenian legislation?

    • According to the Law, founders of the foundation can be:

  • Citizens of the Republic of Armenia.

  • Foreign citizens.

  • Persons without citizenship.

  • Legal entities of the Republic of Armenia.

  • Foreign legal entities.

  • Republic of Armenia.

  • State or local self-government bodies cannot be founders of the fund.

    • The founders are not responsible for the obligations of the foundation, and the foundation is not responsible for the obligations of its founders. The founders of the foundation bear joint responsibility for the obligations related to its creation that arose before the state registration of the fund.

  • How is a foundation established according to Armenian legislation?

    • Creation of a foundation through establishment is carried out by the decision of the founders. The foundation may be created by one person.

    The establishment of a foundation by or with the participation of the Republic of Armenia or the community is carried out correspondingly by the decision of the Government or by the decision of the head of the community with the approval of the community council.

    Foundations are subject to state registration. For state registration, the foundation no later than within 2 months after the day the decision on establishing the foundation has been made, must present to the state registration body the following documents:

  • Application for state registration signed by the head of executive body or the temporary acting head of the executive body of the foundation.

  • At least two copies of the foundation’s charter.

  • Decision on establishing the foundation.

  • Receipt of payment of the state duty.

  • Are there specific requirements for a decision to establish a foundation in Armenia?

    • When making a decision to establish the foundation, the founders must unanimously:

  • approve the charter of the foundation.

  • appoint the head of the executive body of the foundation or the temporary acting head of the executive body.

    • The decision must contain information about the founders.

    The government's decision on the establishment of foundations with the participation of the Republic of Armenia must also contain provisions on the state administration body (bodies) acting on behalf of the founder. The decision on the establishment of foundations with the participation of the community must also contain provisions on the authorized persons acting on behalf of the founder.

  • What are the specific requirements outlined for the foundation charter according to Armenian law?

    • The charter defines:

  • The name of the foundation

  • The location of the foundation.

  • The goals of the foundation.

  • List of the types of entrepreneurial activities that the foundation may engage in.

  • Information about the founder (founders):

  • For natural persons: citizenship, first name, last name, passport information, address of residence or registration,

  • For legal persons: country of incorporation, full name (company name), state registration data, location address,

  • for the community: the full name of the community,

  • for the state: the full name of the state, the full name of the authorized body.

  • the manner of management and governance of the foundation’s property.

  • Beneficiaries of the foundation.

  • the period of activity of the foundation if it was established for a certain period.

  • Manner of formation of the foundation bodies, the quantitative composition of the board of trustees, the powers of the foundation’s bodies, the procedure for their decision-making, including the issues on which decisions are taken unanimously or by a qualified majority of votes.

  • Procedure for liquidating the foundation.

  • Other provisions.

  • What are the timeframes for establishing a foundation in Armenia?

    • After submitting all the necessary documents to the State Register of Legal Entities (hereinafter also referred to as the “Register”), the Register no later than within 10 working days shall perform the registration.

  • Are there any grounds upon which the establishment of the foundation can be rejected?

    • The foundation's state registration is rejected if:

  • the procedure for establishing the foundation established by the Law is violated.

  • The charter of the foundation contradicts the Law.

  • The name of the foundation coincides with the name of another previously registered foundation.

  • All documents required for state registration, defined by the Law, have not been submitted.

    • Refusal of state registration of the foundation may be appealed to the court. It is not allowed to refuse registration of the foundation on the grounds of inexpediency to create it. Refusal of foundation registration is not an obstacle to submit a new application for state registration.

  • What are the bodies associated with the foundation?

    • The bodies of the foundation are:

  • Board of trustees of the foundation.

  • The head of the executive body of the foundation (Hereinafter referred to as the “Manager”).

    • The highest management and supervisory body of the foundation is the foundation's board of trustees. Members of the Board of Trustees of the Foundation may be able-bodied individuals over 18 years of age, including the founders. The quantitative composition of the Board of Trustees cannot be less than 3 members. The Board of Trustees of the Foundation is established in accordance with the procedure established by the charter, and if such a procedure is not established, then each founding member of the Board of Trustees shall have one member.

    The management of the foundation’s current activities is carried out by the Manager. All issues of current management of the fund belong to the authority of the Manager. The manager is elected and dismissed by the board of trustees.

  • What legal rights does the foundation possess according to Armenian law?

    • According to the Law, the foundation according to its statutory purposes has the rights:

  • To disseminate information about its activities without restraint.

  • To establish press and other mass media means.

  • To receive information, necessary for the accomplishment of its statutory purposes, from state and local self-government bodies.

  • To create separated subdivisions (branches, representations) and institutions.

  • To create commercial organizations or to participate in them.

  • To implement other activities not forbidden by the law.

    • The foundation according to the legislation of the Republic of Armenia and its charter may become member of international and foreign non-governmental organizations.

  • What are the duties and obligations of the foundation?

    • The Foundation is obliged to:

    Act in accordance with the Constitution of the Republic of Armenia, the Law and other laws and legal acts, as well as the foundation's charter.

  • To keep records and accounting in the manner stipulated by the Law.

  • To present information and reports to state bodies in cases and in the m

  • To submit information and reports to state bodies in cases and according to the law.

  • To present information and reports to state bodies in cases and in the manner stipulated by the Law.

  • Perform other duties defined by the Law and other laws.

    •  

    © 2024 Legalease Ltd. All rights reserved

    Registered company in England & Wales No. 2423756 VAT 324572722

    Registered address: 188 Fleet Street, London, EC4A 2AG