Many times we want to help other people and we do not know how. However, there are organizations that support the most deprived communities. For this reason, we present you the Requirements to Create a Foundation.
It is an effective way to contribute to those most in need, and in a way to have a wider reach to benefit the masses.
What are the Requirements to Create a Foundation?
The Requirements to Create a Foundation are those described below:
- The purpose of this must be purely social. It has to favor the community in general, and it should not be aimed at taking advantage of the particular benefits of its members.
- A foundation cannot be created for profit. The utility of financial resources cannot be distributed among the members of the entity. These must be reinvested and are used to meet the objectives of the foundation.
- Have a minimum financial contribution of € 30,000 euros. In case it is less, a feasibility report must be drawn up.
The documentation that is needed complements the Requirements to Create a Foundation. These are:
Writ of the Constitution
This writing must have the following information:
- Full name, the civil status of the creator or creators, ages if they are natural persons. In case of being legal persons, the name of the foundation, and for the 2 conditions, nationality. The address of the room and the tax identification number.
- Willingness to create a foundation.
- The legal norms of the foundation.
- Identity of the members of the foundation.
The Elaboration of the Statutes
Once the rules have been drawn up, they must be sent to the Registry of Foundations and the Protectorate. These must contain the following:
- The name must be managed in advance in the Registry of Foundations, a certificate that authorizes that the name to be used does not resemble another that is already registered.
- Foundational objective, which is divided into fundamental objectives and specific operations.
- The address where it will work.
- The territorial space.
- Favored people.
- Structure of the Board of Trustees, the rules for the appointment and replacement of its members. Reason for his cessation, functions and way of discussing and reaching agreements.
- Durability time of the foundation.
- Appointment of employers.
- Internal functions.
Management to Constitute a Foundation
At the time the foundation constitution writing is received, the Protectorate must request the appointed trustees to assume the position. If for some reason they have not done so, you have to insist to register the foundation.
Any foundation obtains legal status from its registration of the public letter of incorporation, in the relevant Registry of Foundations. Registration can only be denied when the document does not comply with the legal provisions.
Only institutions registered in the Registry can use the name of the foundation. In this sense, the distinction in terms of company law is tangible. Enrolling in the Registry is an enunciative issue. As long as the declaration is constitutive, that is, registration is mandatory for said foundation to legally exist.
Once all the Requirements to Create a Foundation, the steps described below must be followed to the letter.
Steps to Create a Foundation
To form a Foundation, the following steps must be followed:
- Bylaws must be created. It is suggested to send the notes to the Registry and the Protectorate before signing in front of the notary, to avoid errors.
- Ask for the negative certificate of the name of the foundation. This certificate must be issued three months prior to the grant date of the document.
- Request the temporary Tax Identification Card (CIF), before the Delegation of Finance, consigning the draft of the statutes and the negative certificate of denomination.
- Prepare the estimate of income and expenses, also memory and account.
- Deposit at least $ 30,000 euros in a financial institution. Detailed information can be found by accessing this link.
- Present the public document in front of a notary, certify the nature of the founders and indicate the power to form a foundation.
- Attend the relevant Ministry of Finance. The public deed must pay taxes on property transfers (ITP) and documented legal acts (AJD).
- Go to the Protectorate, this must verify that the foundation obeys the requirements of the Law.
- Carry out the registration in the Registry of Foundations, and the municipal and regional registry is optional.
- The Registry of Foundations and the Protectorate, grant the foundation the pertinent certification that empowers it to start operating. Being already conformed, it will appear published in the BOE.
Benefits of Forming a Foundation
There are some benefits to creating a foundation. These are:
The creation of a Foundation carries an advantageous fiscal context for its founders. Meanwhile, convenient benefits can be studied, such as reductions and exemptions from specific taxes:
- The Value Added Tax (VAT).
- Personal Income Tax (IRPF).
- The Real Estate Tax.
- Economic Activities Tax (AE).
- The Tax on the Increase in Value of Urban Land.
- Tax on Patrimonial Transmissions and Documented Legal Acts (ITP / AJD).
- The Tax on Constructions, Installations and Works.
The Good Image of the Foundation
At times, it has been observed that recognized companies have formed a foundation to organize charity days and solidarity events for underprivileged communities. This is a great way to boost your company’s image. It can even achieve a good position in the market.
Recommendations for Forming a Foundation
The companies that create a charitable foundation are not always in charge of the administration of the funds. However, for those members who wish to have control over their foundation, we leave you some essential guidelines:
Assume the Required Commitment
You must have enthusiasm for what you do. Since the dedication for these works takes much of the personal time to achieve the goals.
Seek Good Advice and Create Bylaws
An experienced legal advisor is a fundamental support to make decisions regarding the constitution of the foundation, and to present the documentation on their own. A foundation has to be governed by statutes, they must include mandates for the management of the organization. Likewise, the election of the Trustees, necessary assemblies, among other activities.
Development of Award Criteria
Every foundation must elaborate a number of transparent criteria, for the election of the favored ones of the resources. You must also determine the projects that are supported and the times for their completion. The choice of the project and the permission of assignments. Likewise, you can request follow-up reports of those who receive the resources, to establish how the money is used and the scope it had.
Build a Solid Board
Generally these organizations occupy their meeting with members of their family group, however, this is not the best perspective. Since this situation can limit the acquisition of resources.
Develop a Sustainable Plan
Execute an action plan, where resources are collected to maintain the Foundation.
This through activities such as dinners, requests through email, etc.
The idea is to raise money from everyone you know, and to get someone interested in what the Foundation does.
All non-profit entities have to prevent the fight of interests. For example, use the Organization to progress in business matters. In the same way, these organizations cannot generally intervene in political events without jeopardizing their status of exemption from taxes.
Manage Resources Appropriately
It is essential to support the Foundation and the company as 2 isolated institutions with different accounts. If you make a contribution from your company to the Foundation, do so in such a way that it is clearly registered to guarantee financing.
On the other hand, it is not convenient to use the resources of this for your company, unless your legal advisor authorizes an operation. It is recommended to accept that this is not admissible.
What is it?
A Foundation is an entity made up of one or many people. And they can be natural or legal (companies, partnerships, among others). In this sense, any body has the right to modify its legal image and become a Foundation.
The members that make up the foundation are those who make decisions regarding the objective and operation of the organization. However, a Board of Trustees will be appointed which guides, rige and watch over the will of its creators.
Any foundation is constituted without economic ends by decision of its creators. And heritage is enduring in terms of community-level goals. And it differs from societies, in which they have no partners, however, they can stipulate fixed amounts for employers.
Any natural person with total ability to act can be patrons, and legal entities which must appoint a natural or natural person to represent them. The trustees have to admit their position, by means of a public writing in front of a notary, to the Registry of Foundations or in front of the Board of Trustees.
The admission of the trustees is formally communicated to the Protectorate, and must also be registered in the Registry of Foundations. The employers have to choose the President from among their members. Appoint one or more vice-presidents, who accept the functions of the president due to illness or lack thereof.
Similarly, the Board of Trustees must choose a secretary. It can be chosen from among its members, and they can give their opinion in the meetings organized by the Board of Trustees. It could also be a person other than the Board of Trustees, however, they can have an opinion at the meetings but not decide.
Through foundations it is possible that more and more people join the work of contributing financially to support the underprivileged. This is why it is important to know the Requirements to Create a Foundation.
There are many foundations that work for the people who have the least, such as: Abandoned children, animal shelters, homeless citizens, among others.
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