March 25, 2022

Non-governmental non-profit organizations

Table of Content

1. Foundation of non-governmental non-profit organizations

2. Consideration of documents submitted for state registration of NGOs, terms

3. About the NGOs article association

4. Founders and participants of NGOs

5. The amount of the state fee for the registration of NGOs

6. About the property of a non-governmental non-profit organization

7. Taxes paid by NGOs

8. About the procedure of the liquidation of non-governmental non-profit organizations

List of Regulatory legal acts:

Civil Code of the Republic of Uzbekistan;
Tax Code of the Republic of Uzbekistan;
Law of the Republic of Uzbekistan “On non-governmental non-profit organizations” of April 14, 1999, No. 763-I;
Resolution of the Cabinet of Ministers of the Republic of Uzbekistan “On the approval of the regulation on the procedure for liquidating non-governmental non-profit organizations” dated January 15, 2015 No. 5;
Appendix No. 1 to the Resolution of the Cabinet of Ministers dated March 10, 2014 No. 57 “On the procedure for state registration of non-governmental non-profit organizations.”

This memorandum will reveal the essence, the procedure for registration, liquidation and other things related to the creation of non-governmental non-profit organizations in Uzbekistan.

1. Foundation of non-governmental non-profit organizations

First of all, a non-governmental non-profit organization (further referred as “NGO“) is an organization created on a voluntary basis by individuals and (or) legal entities that does not pursue the extraction of income (profit) as the main goal of its activities and does not distribute the received income (profit) among its participants (members). NGOs are created to protect the rights and legitimate interests of individuals and legal entities, other democratic values, achieve social, cultural and educational goals, meet spiritual and other non-material needs, carry out charitable activities and for other socially useful purposes. It is necessary to know that NGOs can be created in the form of a public association, a public foundation, an institution, as well as in another form provided for by legislative acts.

Having received general concepts about the purpose of creating an NGO, we will move on to the moment of its creation. That is, we will analyze the procedure for registering NGOs. In accordance with Article 21 of the Law of the Republic of Uzbekistan “On Non-Governmental Non-profit Organizations”, the state registration of NGOs is carried out by the judicial authorities.

The application for state registration of NGOs in the form, according to Appendix No. 1, is submitted to the registering body within two months, and to the public association – within one month from the date of the constituent congress (conference) or general meeting. Thus, for the state registration of a non-governmental non-profit organization, the following documents are submitted to the registration authority:

a statement signed by the members of the governing body of this non-governmental non-profit organization, indicating the last name, first name, patronymic, year and place of birth, place of residence of each and address;
the charter of a non-governmental non-profit organization or the regulations on a representative office or branch that is a legal entity, in the state language in two copies;
foundation agreement-for associations (unions) of non-governmental non-profit organizations;
the protocol of the founding congress (conference) or general meeting or the decision of the founder on the establishment of a non-governmental non-profit organization (for republican and inter-regional non-governmental non-profit organizations, information on the establishment of relevant representative offices and branches, the formation of governing and other bodies is also indicated);
a document confirming the right of ownership or use of real estate, the location of which is intended for use as a postal address of a non-governmental non-profit organization;
information about the initiators of the creation or founders of a non-governmental non-profit organization;
the list of initiative citizens, namely at least three thousand people-for trade unions;
at least ten — for other public associations, with the exception of political parties;
a copy of the certificate of state registration of the parent non-governmental non-profit organization – for representative offices and branches;
document confirming the formation of initial funds-for public funds;
notarized copy of the will-for public funds created under the will;
bank payment document on payment of the state fee.

NGOs that are created by reorganization in the form of a merger, division, allocation, or transformation, additionally submit the following documents:

confirmation of written notification of all creditors known to the reorganized organizations and publication in the mass media of a report on the reorganization;
a transfer act (in case of merger and transformation) or a separation balance sheet (in case of division and separation) containing provisions on succession for all obligations of the reorganized organizations in respect of all their creditors and debtors, including obligations disputed by the parties;
the original certificate of state registration, as well as a certificate from the internal affairs bodies on the destruction of the seal and stamp of the organization (in the case of merger, division and transformation).

At the state registration of separate divisions that are legal entities, NGOs submit the regulations on the separate division developed in accordance with the charter of the parent organization, or a copy of the charter of the parent organization, which provides for the procedure for the creation, organization and termination of activities, rights and obligations of separate divisions.

The charters of NGOs operating in different territories should contain the procedure for creating, organizing and terminating their activities, as well as the rights and obligations of separate divisions:

on the territory of one or more foreign states-for international NGOs;
in at least three territorial subjects – for republican NGOs;
no more than two territorial subjects — for inter-regional NGOs.

The documents submitted for the state registration of a separate subdivision must be certified by the central governing body of the NGO.

2. Consideration of documents submitted for state registration of NGOs, terms

The documents submitted for the state registration of NGOs are considered within one month from the date of their submission.

The registration authority has the right to verify the authenticity of documents on the state registration of NGOs for their compliance with the legislation.

The registration authority has the right, if necessary, to send the relevant organizations the documents submitted for the state registration of NGOs for examination. The organization that received the documents must submit its opinion within twenty days.

If the conclusion contains an opinion about whether the refusal of state registration of NGOs, the organization needs to substantiate his conclusion in the following cases:

founding documents of NGOs are aimed at violent change of the constitutional system and undermining the sovereignty, integrity and security of the Republic of Uzbekistan, the infringement of the constitutional rights and freedoms of citizens, war propaganda, social, national, racial and religious enmity, and the encroachment on the health and morality of citizens;
the full list of documents is not provided or they are not properly executed;
the documents are submitted after the expiration of a two-month period (for a public association — a month period) from the date of adoption of the charter;
previously registered NGO with the same name;
the procedure for the formation of an NGO established by law has been violated or its constituent documents do not comply with the law;
it is established that the constituent documents submitted for registration contain intentionally false information;
the name or symbolism of NGOs encroaches on the morality, national and religious feelings of citizens;
The constituent documents of NGOs provide for the formation of paramilitary associations.

Also, the state registration of NGOs may be refused in other cases, when the constituent documents contain provisions that contradict the Constitution and legislative acts of the Republic of Uzbekistan. It is important to know that the refusal of registration on the grounds of the inexpediency of creating an NGO is not allowed!

Refusal of state registration of NGOs is not an obstacle to the re-submission of documents for state registration, provided that the grounds for refusal are eliminated. The decision to refuse the state registration of an NGO is communicated to the applicant in writing within three days after its adoption.

The decision of the registering authority to refuse state registration of an NGO may be appealed to the court in accordance with the established procedure.

3. About the NGOs articles of association

The articles of association of a non-governmental non-profit organization provides for:

the name, goals and objectives of a non-governmental non-profit organization, its organizational and legal form, and the territory within which it operates;
the structure and governing bodies of a non-governmental non-profit organization, if necessary, its control and audit bodies (for public funds — mandatory) or the obligation to involve auditors (audit firms);
the competence and procedure for the formation of the governing bodies, the terms of their powers, the location of the permanent governing body;
conditions and procedure for the acquisition and loss of membership, rights and obligations of members – for associations with established membership;
sources of formation of funds and other property, the rights of a non-governmental non-profit organization and its structural divisions for property management;
procedure for reorganization and liquidation;
the procedure for making amendments and additions to the charter.

The articles of association of a non-governmental non-profit organization may contain a description of its symbols. The articles of association may also provide for other provisions related to the activities of a non-governmental non-profit organization that do not contradict the law.

4. Founders and participants of NGOs

Founders, participants (members) of a non-governmental non-profit organization may be individuals who have reached the age of eighteen, as well as legal entities.

Members of a youth non-governmental non-profit organization can be persons who have reached the age of fourteen, and members of children’s non-governmental non-profit organization can be persons who have reached the age of ten. The conditions and procedure for the acquisition and loss of membership, including the conditions for retirement from membership of a non-governmental non-profit organization by age, are determined by the charters of the relevant non-governmental non-profit organizations.

The requirement to indicate in official documents the membership or participation in the activities of a non-governmental non-profit organization is not allowed. The membership or non-membership of citizens in a non-governmental non-profit organization may not serve as a basis for restricting their rights and freedoms.

Foreign citizens and stateless persons, on an equal basis with citizens of the Republic of Uzbekistan, may be founders, participants (members) of a non-governmental non-profit organization, with the exception of cases established by laws and international treaties of the Republic of Uzbekistan.

5. The amount of the state fee for the registration of NGOs

International non-governmental non-profit organizations, as well as representative offices and branches of international and foreign non-governmental non-profit organizations 12.5 BCV (basic calculated value)

Republican, inter-regional non-governmental non-profit organizations 3 BCV

Non-governmental non-profit organizations whose activities extend to the territory of the region 1 BCV

Non-governmental non-profit organizations whose activities extend to the territory of the district, city, village, locality 50% of the BCV

6. About the property of a non-governmental non-profit organization

A non-governmental non-profit organization may own buildings, structures, residential premises, equipment, inventory, money, including in foreign currency, securities and other property. The property of NGOs is protected by law. As the NGO is a legal entity, and the obligatory requisite of legal entities is the presence of a bank account. It follows from this that the presence of a bank account is mandatory for NGOs as well. The question arises, why do they need a bank account? A bank account allows its owner:

To hand over the proceeds to the bank and keep it in a non-cash account;
Accept non-cash payments from partners and clients;
Pay for goods, materials, rent, services provided to business;
Transfer salaries of employees to bank cards;
Pay taxes, utility bills, etc.

The sources of the formation of the property of a non-governmental non-profit organization can be:

entrance and membership fees, if they are provided for by the charter;
one-time and regular income from the founders, participants (members);
voluntary property contributions and donations;
income (profit) received from business activities, used only for the implementation of statutory purposes;
other income not prohibited by legislation.

7. Taxes paid by NGOs

According to the Tax Code, an NGO is a legal entity registered in the form established by law for non-commercial activities

Taxation of non-profit organizations is regulated by the Tax Code. NGOs are subject to all the requirements of the Tax Code imposed on taxpayers: registration with the tax authorities, submission of tax reports, timely payment of established taxes and mandatory payments, liability for non-compliance with tax legislation, etc.

Thus, for NGOs, there are the following types of taxes, depending on their type of activity, prescribed in the charter of the NGO:

Value Added Tax (VAT )- 15%;
Income tax (depending on the type of activity)- base value 15%;
Turnover tax (depending on the type of activity)- base value 4%;
Property tax – 2%;
Land tax – the tax rate depends on the location of the land. The exact data are specified in Article 429 of the Tax Code.
Tax for the use of water resources-depends on the type of activity. The exact data are specified in Article 445 of the Tax Code.
Social tax (depending on the type of activity)- base value 12%;
Personal income tax – 12% for residents of the Republic of Uzbekistan, 20% for non-residents.

8. About the procedure of the liquidation of non-governmental non-profit organizations

There are two types of liquidation of NGOs, voluntary and compulsory. Voluntary liquidation of NGOs is carried out by the decision of its supreme body, and compulsory liquidation — on the basis of a court decision.

Consider the first type of liquidation – voluntary. The decision on the voluntary liquidation of NGOs is made by its highest body. The decision specifies:

the composition of the liquidation commission (if the liquidation commission is appointed by the founders (participants) of the NGO, this is indicated in the decision);
a list of existing separate divisions of NGOs (with a separate indication of divisions that are legal entities and non-legal entities);
an indication of the beginning of cases for the termination of the activities and liquidation proceedings of separate divisions, if, in accordance with the constituent documents, the liquidation proceedings of separate divisions are assigned to their governing bodies;
planned liquidation period;
the fate of the property remaining after the satisfaction of creditors’ claims (information about the ways of its use for the main statutory purposes and tasks of NGOs and (or) about the recipients of this property as a charitable donation).

Then, information about the composition of the liquidation commission (full name, place of residence, main place of work and position, phone numbers of the commission members), as well as the decision on the liquidation of the NGO adopted by its highest body, is provided to the justice body that registered the NGO within three working days.

Further, within two working days, the registering body enters into the unified state register of legal entities information that the NGO is in the process of liquidation and informs the state tax service and statistics bodies, as well as the department of the Bureau of Enforcement under the Prosecutor General’s Office of the Republic of Uzbekistan of the district (city) (hereinafter — the Bureau) at the place of state registration of the NGO.

From the moment of approval of the composition of the liquidation commission with the registration authority, all the powers for the management of NGOs are transferred to it. The founders (participants) and (or) members of the governing body of the NGO are obliged to hand over all documentation related to the activities of the NGO, seals and stamps, as well as other property to the liquidation commission for the inventory within three working days.

As a next step, the liquidation commission sends a copy of the decision on voluntary liquidation and a sheet with a sample signature of the chairman of the liquidation commission to:

the bank servicing the main deposit account on demand of the NGO (hereinafter referred to as the main account), and to the commercial bank where the funds of the NGO are accumulated in foreign currency;
banks that service secondary deposit accounts, savings deposit accounts and term deposit accounts of NGOs in the national currency, as well as deposit accounts of separate divisions that are not legal entities — an application-order for their closure and transfer of the available balances to the main account of NGOs in the national currency;
banks that have opened demand deposit accounts, savings and term deposit accounts in foreign currency-an application-order to close them and transfer the remaining funds to the demand deposit account of an NGO in foreign currency in the bank where its main account is opened in national currency.

During the same period, the liquidation commission (after approval of its composition by the registration authority):

take measures in accordance with the procedure established by law to terminate labor relations with employees of NGOs, as well as to close separate divisions that are not legal entities;
make an inventory of the assets and liabilities of an NGO in accordance with the procedure established by law, including making a register of enforcement documents for which the NGO participates as a debtor;
makes calculations for all types of taxes and other mandatory payments paid by NGOs for the period from the beginning of the year to the date of notification of the registration authority on the liquidation of NGOs;
taking measures to receivable NGOs, and identifying and written notice of the creditors on liquidation of NGOs with the confirmation (stamp on the date of receipt, post receipt, a written or electronic message, etc.);
arrange for the publication in one or more periodicals of the Declaration on the elimination of DNAs, indicating:

full and abbreviated names of NNO (also lists all full and abbreviated names of the NGOs that have changed in the year preceding the elimination of);
location (postal address), taxpayer identification number of the NGO;
information about the date of registration and the registration authority (name and address);
information about the decision to liquidate an NGO (date, serial number);
the deadline for accepting applications with creditors’ claims. This period should not be less than two months from the date of publication of the specified ad.

After that, the department of the Bureau of the district (city) at the place of state registration, no later than ten days from the date of receipt of the notification of the registering authority, in accordance with the established procedure, finds out the presence in the production of an enforcement document in which the liquidated NGO participates as a debtor. In the presence of the relevant executive document, the state executor, in accordance with the procedure established by law, ends the enforcement proceedings on it and sends the executive document to the liquidation commission for execution within the framework of the liquidation procedure. The state tax service body at the place of state registration of an NGO within three working days from the date of receipt of the notification of the registering body, in accordance with the established procedure, begins to check the activity (audit) Non-governmental organization, the term of which should not exceed thirty calendar days.

At the end of the deadline for filing claims by creditors and taking into account the results of the audit conducted by the state tax service body, as well as taking into account the compiled register of executive documents, the liquidation commission draws up a draft interim liquidation balance sheet. The interim liquidation balance sheet is approved by the supreme body of the NGO.

Then, the liquidation commission within five working days after the approval of the interim liquidation balance sheet notifies each creditor in writing with the receipt of confirmation (a note on the date of acceptance, a postal receipt, a written or electronic message, etc.) of the recognition or rejection of its claims, the amount of the recognized claim.

Further, in accordance with the interim liquidation balance, starting from the date of its approval by the liquidation Commission is payment to the creditors in order of priority the following:

first and foremost — the demands arising from the employment relationship, for alimony and payment of royalties under copyright treaties, as well as the requirements of people and NGOs responsible for causing harm to life and health, by adding the appropriate time payments;
in the second place-payments to the State Budget of the Republic of Uzbekistan and state trust funds;
in the third place — the claims of other creditors (according to the calendar order).

However, if it is found impossible to satisfy the creditors’ claims in full, the liquidation commission is obliged to apply to the economic court with an application for declaring the NGO bankrupt. From the moment the NGO is declared bankrupt, the voluntary liquidation is terminated, and the further procedure is carried out in accordance with the bankruptcy legislation.

In the case of the remaining property, but after the full satisfaction of the creditors’ claims, the liquidation commission uses it in the ways and in the directions specified in the decision of the supreme body on the liquidation of NGOs, and (or) transfers it to charitable donations.

If it is not possible to use the remaining property for the purposes of the NGO, it can be transferred to the ownership of non-profit organizations that perform tasks in areas similar to the main activities of NGOs. In all cases, documents certifying the fact of disposal of the property are issued.

It is not allowed to distribute the remaining property among the founders (participants), members of the governing agency or other employees of the NGO.

The next step, the liquidation commission draws up a draft of the liquidation balance sheet after:

completion of settlements with creditors, as well as the actual execution of the issued enforcement documents, in which the NGO participates as a debtor;
payment of taxes and other mandatory payments, financial sanctions, including the results of the audit;
disposing of the property in accordance with the established procedure after the creditors ‘ claims are fully satisfied.

After the adoption of the liquidation balance sheet, the state tax service body, provided that there are no arrears of non-profit organizations for taxes and other mandatory payments, is obliged to issue a corresponding conclusion to the liquidation commission within one working day. The territorial administration of the Bureau, provided that there is no enforcement document in their production, in which it does NOT participate as a debtor, is obliged to send a written response to the liquidation commission within three working days.

Conclusion of the state tax service body

Then, after receiving the conclusion of the state tax service body on the absence of arrears in taxes and other mandatory payments, as well as a written response from the territorial office of the Bureau on the absence of the relevant outstanding executive document in the production, the liquidation commission applies to the bank where the main account of the NGO is opened, with an application-order to close the account. The Bank closes an account belonging to an NGO within one business day and issues an opinion to the liquidator on closing the main account.

If an NGO has separate divisions that are not legal entities, the liquidation commission sends letters to the relevant judicial authorities within three working days after the main account is closed in order to make an entry on their liquidation in the register.

The letter specifies the guarantee of the absence of obligations of the separate division to third parties and the original certificate of registration of the separate division of a non-governmental non-profit organization is attached.

The judicial authority that received the letter, within three days on the occasion of the liquidation of a separate division, makes a corresponding entry in the Register of separate divisions that do not have the status of a legal entity, and within two days notifies the liquidation commission in writing. After the closure of the main one and after receiving notifications from the relevant judicial authorities about their exclusion from the register, the liquidation commission within three working days submits to the state archive all accounting and other documents provided for by law, as well as seals and stamps to the internal affairs bodies for destruction.

To make an entry on the liquidation of an NGO in the unified state register of legal entities, the liquidation commission submits the following documents to the registration authority:

application for making an entry on the liquidation of an NGO in the state register;
an announcement about the liquidation of NGOs published in one or more periodicals;
originals of the certificate of state registration of a non-governmental non-profit organization and the charter (regulations) of the NGO;
liquidation balance sheet approved in accordance with the established procedure;
certificates of servicing banks on the closure of all non-profit organizations ‘ accounts;
notification of the judicial authorities about their exclusion from the relevant registers-if there are separate divisions of NGOs;
documents certifying the fact of disposal of the remaining property after full satisfaction of creditors’ claims;
certificate of the internal affairs bodies on the destruction of seals and stamps;
originals of all licenses and permits, as well as certificates of state registration of NGO symbols, if any;
conclusion of the state tax service body on the absence of arrears in taxes and other mandatory payments;
a written response from the territorial office of the Bureau on the absence of an outstanding enforcement document in which the NGO participates as a debtor;
a certificate confirming the submission of the NGO documents to the state archive.

Within five working days after receiving all the documents, the registration authority makes an entry in the state register on the liquidation of NGOs.

An entry in the state register may be refused if the full list of documents is not provided or they are not properly executed, and it is also established that the submitted documents contain intentionally inaccurate information or violate the procedure for the liquidation of NGOs established by law. In case of refusal to make an entry in the state register, the registration authority sends a letter to the liquidation commission indicating the specific reasons for the refusal and returns all the documents received.

After making an entry in the state register on the liquidation of an NGO, the registration authority within two working days:

informs the liquidation commission, the state tax service and statistical bodies about the liquidation of NGOs in accordance with the established procedure;
transfers licenses and permits (if any) issued by NGOs to the authorities that issued them.

Now consider the second type of liquidation – forced. The decision on the forced liquidation of NGOs is made by the court on the grounds provided for by law. The liquidation commission is appointed by the court in consultation with the registration authority. The liquidation commission, after receiving the court decision, submits a copy of it to the registration authority within three working days. The registration authority, after receiving a copy of the court’s decision on the liquidation of an NGO, enters information into the unified state register of legal entities within two working days. This information contains information that the NGO is in the process of liquidation and informs the state tax service and statistics authorities, as well as the department of the Bureau of the district (city) at the place of state registration of the NGO.

From the moment the court decision comes into force, all the powers to manage NGOs are transferred to the liquidation commission. Founders (participants) NGOs or members of the governing body are required to submit to the liquidation commission within three working days all documents related to the activities of NGOs, as well as seals and stamps of NGOs and other property on the list.

Liquidation proceedings are carried out in accordance with the procedure and terms, just as in the case of voluntary liquidation of NGOs. At the same time, the interim liquidation balance sheet is approved by the liquidation commission after approval by the body that registered the NGO. If the registration authority that received the draft interim liquidation balance sheet does not submit a written objection within one week, the interim liquidation balance sheet is considered agreed.

In the case of the remaining property, but after the full satisfaction of the creditors ‘ claims, the liquidation commission uses it for the directions specified in the court decision on the liquidation of the NGO. At the same time, documents certifying the fact of disposal of the property are issued.

If the court’s decision on the liquidation of an NGO does not resolve the fate of the property, the liquidation commission, after fully satisfying the creditors ‘ claims, within five working days, applies to the court with an application for a decision on the fate of the remaining property.

The liquidation commission draws up a draft liquidation balance sheet after:

completion of settlements with creditors, as well as the actual execution of the issued enforcement documents, in which the NGO participates as a debtor;
payment of taxes and other mandatory payments, financial sanctions, including the results of the audit;
use of the remaining property in the directions specified in the court decision, after full satisfaction of the creditors ‘ claims.

The liquidation balance sheet is approved by the liquidation commission after approval by the body that registered the NGO. If the registration authority that received the draft liquidation balance sheet does not submit a written objection within one week, the liquidation balance sheet is considered agreed.

After approval, the liquidation balance sheet is submitted to the state tax service body. At the same time, the liquidation commission sends a request to the territorial office of the Bureau about the presence in the production of outstanding enforcement documents, according to which the liquidated NGO participates as a debtor.

After the adoption of the liquidation balance sheet, the state tax service body, provided that the NGO does not have any arrears in taxes and other mandatory payments, is obliged to issue a conclusion to the liquidation commission within one working day on the absence of arrears in taxes and other mandatory payments. The territorial administration of the Bureau, provided that there is no enforcement document in its proceedings, in which the NGO participates as a debtor, is obliged to give a written response to the liquidation commission within three working days about the absence of the relevant non-executed enforcement document in the proceedings.

Non-governmental non-profit organizations

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