At the beginning of the 20th century, charitable foundations in the modern sense began to emerge and flourish in the United States. Charitable foundations in the modern sense of China, such as the China Charity Federation, the Chinese Red Cross, the Soong Ching Ling Foundation, the Yanran Angel Fund, and the One Foundation, are also well-known and flourishing.
With the Third Plenary Session of the 18th CPC Central Committee proposing to "improve the tax reduction and exemption system for charitable donations", China's charity will also usher in another peak. So, how can we set up a charitable foundation in China? According to the "Funda Management Regulations" and other relevant information, the author summarized the eight major steps to establish a charitable foundation.
1 First, conditions for establishing a foundation.
Natural persons, legal persons or other organizations can apply to establish a foundation. The applicant can be the donor of the foundation, or other citizens or organizations who are enthusiastic about public welfare. Foundations are divided into public funds (can be raised from the public) and non-public funds (cannot be raised from the public). Public funds are divided into national public funds and local public funds according to the regional scope where funds can be raised. The establishment of a foundation should meet the following conditions:
(1) Established for specific public welfare purposes;
(2) The original fund of a national public fund shall not be less than RMB 8 million, the original fund of a local public fund shall not be less than RMB 4 million, the original fund of a non-public fund shall not be less than RMB 2 million, and the original fund of a non-public fund registered with the Ministry of Civil Affairs shall not be less than RMB 20 million; the original fund must be cash incurred;
(3) There is a standardized name, charter, organizational structure, and full-time staff that are suitable for their activities;
(4) Have a fixed residence;
(5) Be able to bear civil liability independently.
2 Second, special requirements for foundation name.
(1) The name of the foundation shall reflect the business scope of the public welfare activities. The name of the foundation shall include the font size and the business scope of the public welfare activities in turn, and end with the words "Foundation". The name of the public fund may not use the font size. The font size of the public fund shall not use the name of a natural person, the name or font size of the legal person or other organization;
(2) National public funding foundation shall use the words "China", "China", "National", "National" and other words in the name. Non-public foundations are not allowed to use the above words.
(3) Local public offering foundations and non-public offering foundations registered by civil affairs departments of provincial, autonomous regional, and municipal people's governments shall be named as the name of the county or above administrative division of the location. If the name of an administrative division below the provincial level can be titled as the name of the province, autonomous region, or municipality directly under the central government. If the name of the municipal district is given, the name of the city shall be given at the same time;
(4) The font size of a non-public foundation can use the name of a natural person, the name or font size of a legal person or other organization, and the font size of a public foundation cannot use the name of a natural person, the name or font size of a legal person or other organization.
3 Third, conditions for the person in charge of the foundation.
The person in charge of the foundation includes the chairman, vice chairman and secretary general.
(1) The chairman, vice chairman and secretary-general of the foundation shall not be concurrently appointed by current state staff; the chairman of the foundation shall be the legal representative; the legal representative of the foundation shall not be the legal representative of other organizations at the same time;
(2) The legal representative of the public fund and the original fund from the mainland of China shall be the mainland residents;
(3) If the crime is sentenced to control, detention or fixed-term imprisonment for a crime, and the sentence is less than 5 years from the date of execution, the crime is sentenced to deprivation of political rights during the execution period or has been sentenced to deprivation of political rights, and has been violated by
(3) If the crime is sentenced to deprivation of political rights for a crime, or has been sentenced to deprivation of political rights for a crime, or has been sentenced to deprivation of political rights for a crime, or has been violated by
A foundation whose registration has been revoked inLaw serves as the chairman, vice chairman or secretary-general and bears personal responsibility for the illegal acts of the foundation. If the foundation is not more than 5 years from the date of revocation, it shall not serve as the chairman, vice chairman or secretary-general of the foundation;
(4) Hong Kong residents, Macao residents, Taiwan residents or foreigners who serve as the foundation's chairman, vice chairman or secretary-general shall not stay in mainland China for less than 3 months each year.
4 Fourth, composition of foundation organizational structure.
(1) The board of directors is the decision-making body of the foundation, with 5 to 25 board members;
(2) Non-public foundations established with private property, the total number of foundation directors who have close relatives between each other shall not exceed one-third of the total number of directors; other foundations, personnel with close relatives and directors shall not serve on the board at the same time;
(3) The foundation has a supervisor, and the term of office of the supervisor is the same as that of the director. The close relatives and accounting personnel of the foundation directors, directors and directors shall not serve on the board at the same time;
(4) The directors who receive remuneration at the foundation shall not exceed 1/3 of the total number of directors; supervisors and directors who do not serve full-time jobs in the foundation shall not receive remuneration from the foundation;
(4) The directors who receive remuneration at the foundation shall not exceed 1/3 of the total number of directors; supervisors and directors who do not serve full-time jobs in the foundation shall not receive remuneration from the foundation;
(5) When the foundation director has personal interests and the foundation interests, he shall not participate in decision-making on related matters; the foundation directors, supervisors and their close relatives shall not have any transactions with the foundation.
5 Fifth, the procedure for establishing a foundation.
(1) After review and approval by the business supervisory unit, all valid application materials will be submitted to the registration management authority;
(2) After review by the registration management authority, if registration is approved, the applicant shall issue the foundation legal person registration certificate after completing the registration procedures online;
(3) After the foundation is registered, he shall apply for seal engraving at the Ministry of Civil Affairs’ Civil Organization Service Center; apply for organizational code certificates at the National Organization Code Center, apply for tax registration at the tax department, open a bank account in the bank, and report to the registration management authority for filing.
6 Sixth, determination of foundation registration and management authority.
(1) The civil affairs department of the State Council and the civil affairs departments of the people's governments of provinces, autonomous regions, and municipalities directly under the Central Government are the registration and management agencies of the foundation;
(2) Foundations that must be registered with the Ministry of Civil Affairs include: national public fund foundations; foundations that intend to be legal representatives of non-mainland residents; non-public fund foundations that the original fund exceeds 20 million yuan, and the promoter applies for establishment to the Civil Affairs Department of the State Council; representative agencies established by overseas foundations in mainland China.
7 Seventh, when applying for establishment, the documents (in duplicate, at least one of the originals) that the applicant should submit (1) when applying for establishment registration (the reason for establishing the foundation, as well as the basic situation of the applicant (main donor) and the situation of participating in and supporting public welfare undertakings in recent years; the basic situation of the foundation, including: name, purpose, business scope, original fund and its donor, chairman, etc.The application is signed or stamped by the applicant);
(2) Documents of the business supervisory unit's agreement to establish registration (stating that the foundation is established and agreed to be its business supervisory unit, assume corresponding duties and stamping);
(3) Draft of the articles of association (draft is formulated in accordance with the example text of the articles of association);
(4) Certificate of use of residence (if the residence is for lease, a copy of the lease contract and a copy of the property certificate must be provided; if the residence is provided free of charge by other organizations or individuals, the property owner must issue a certificate and provide a copy of the property certificate);
(5) Donation commitment letter from the unit or individual source of funds (stating the amount of the intended donation, as the original fund for the intended foundation, promising that the funds are the legal property of the donor, signed by the donor or the seal of the donor);
(6) Copy of the "Filing Form for Directors and Supervisors of the Foundation" and identity documents (including the expected vice chairman, secretary general, director, and supervisor, each with one form, with the seal of the unit where he is located);
(7) Full-time commitment letter of the Secretary-General (promises to fully engage in the work of the Secretary-General after the foundation is established, with the seal of the personnel department of the unit where he is located);
(8) Application Form for Foundation Legal Person Registration"
(9) Registration Form for Foundation Legal Representatives of Foundation"
(10) "Foundation Charter Approval Form for Foundation"
*The requirements of local civil affairs departments are different, and the specific application shall be subject to the local area.
8 Eighth, Application for Foundation Tax Exemption Qualifications
After the Foundation is officially established and obtained the legal person registration certificate and seal, it can be based on the provisions of the "Notice on Issues Related to Pre-Tax Deduction of Public Welfare Donations" (Financial and Taxation No. 2008160) and its Supplementary Notice (Financial and Taxation [2010] No. 45) jointly issued by the Ministry of Finance, the State Administration of Taxation, and the Ministry of Civil Affairs, and its Supplementary Notice (Financial and Taxation [2010] No. 45). In addition, the foundation may also apply for tax exemption qualifications to the local tax authority in accordance with the provisions of the "Notice on Issues Related to the Recognition and Management of Tax Exemption Qualifications of Non-Profit Organizations" issued by the Ministry of Finance and the State Administration of Taxation.
The establishment regulations of charitable foundations do not well reflect the particularity of charitable foundations "charity" in the "Funding Management Regulations". In addition, the establishment threshold is too high, which has become a bottleneck that plagues and restricts the registration of charitable foundations. At present, " Charity Law " will be released soon. We look forward to the birth and growth of the charity foundation in a more relaxed and more standardized legal environment!
Hanzheng Family Office, focusing on foundations and trusts.
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