How to start a non-profit? A guide for associations, institutes and foundations

Are you interested in charity or do you want to develop a common interest with other people in the field of sport, culture, ecology or perhaps your hobby? Start a non-profit organisation. We will advise you on which legal form to choose and how to go about setting up a non-profit.

The essence of a non-profit organisation

As the name suggests, a non-profit pursues goals other than primarily making a profit for its owners or shareholders.

Its essence, or mission, is to help socially vulnerable or similarly at-risk groups or to organize a group of people to better achieve common goals through a nonprofit - such as athletes, firefighters, or a group of enthusiasts with the same hobby.

Nonprofits can be public (typically schools, hospitals, cultural institutions) or private (most often an association, institute, foundation or endowment).

How to get funding for your nonprofit organization

If you are thinking about starting a non-governmental non-profit organization (NGO), choose the legal form that best suits your purpose and mission from the following. We will guide you through the basics of what you need to know to set one up.

1/ How to set up an association

A society is a great choice for anyone who wants to get organised in an area of interest - from sports to hobbies to conservation.

To start a society you need:

• At least three people as founding members;
• a name that is not confused with another legal entity;
• a statutory and supreme body of the association (typically a members' meeting);
• draw up statutes in which you specify the seat and purpose of the association, the rights and obligations of the members;
• or hold a constituent meeting of the association to confirm everything;
• register your association in the public (association) register so that it actually comes into existence.

2/ How to set up an institute

An institute is a typical form of non-profit for the provision of social or other public services. It combines both a membership and a property component.

To establish an institute, you will draw up a constitution, which will include in particular:

• the name of the institute;
• the address of the registered office;
• the purpose of the institute and a definition of its activities;
• information about the institute's organs - i.e. the founder and the members of the board of trustees;
• information on the amount of the mandatory contribution.

Here, too, of course, you must have the institute registered in the public register (of institutes).

3/ How to set up a foundation or endowment fund

A foundation, like an institute, is devoted to charitable work. However, instead of providing social services, it helps with the assets it manages.

Establishing a foundation is more challenging than establishing the previous types of non-profits, mainly because of the need to deposit a foundation principal of at least CZK 500,000.

You also need a foundation charter, which will include:

• the name of the foundation and its registered office;
• the purpose of the foundation;
• identification of the founder and the amount of his/her contribution;
• the total amount of the foundation capital;
• details of the administrator of the deposits, members of the board of directors and the supervisory board;
• the conditions for making foundation contributions.

The foundation deed may take the form of both the foundation deed and the so-called acquisition in case of death (this is the contract of inheritance, will and endowment). In addition, the establishment of a foundation must take the form of a notarial deed. Again, the foundation is only established after registration in the public (foundation) register.

An endowment fund is a simpler and cheaper variant of a foundation - you can dispense with the foundation deed and the notarial deed to establish it. However, the other conditions remain the same.

Setting up a non-profit without complications

Not sure which legal form of non-profit organisation is best suited for your project and don't want to study the law at length? Let us discuss your ideas about the purpose of a non-profit and propose the optimal solution. We will be happy to handle the formation of the association, including registration, for you.

If you want to combine the pleasant with the useful and concentrate on making a profit, we will help you set up an LLC. You can then also support charitable activities with your business activities or earnings.

Contact information

Write to us and we’ll get back
to you within 24 hours.

+420 226 224 724

info@jake-james.cz

Revoluční 736/15, Praha 1

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