Non-profit Organisations

A Non-Profit Organisation(NPO) is a legal entity whose objectives may include to achieve social, cultural, scientific, educational, charitable, and managerial goals; to protect the rights and lawful interests of citizens and organisations; to resolve disputes and conflicts; to satisfy the spiritual and other needs of citizens; to protect health and the environment; to develop physical culture and sports; to provide legal assistance, and for other purposes aimed at ensuring public and member benefits.

NPOs cannot involve in the generation of profit, and any net income earned is not distributed among its participants; however, an NPO may engage in entrepreneurial activities if such activities are in accordance with its chartered objectives.

An NPO may be established in the form of an institution, public association, joint-stock company, consumer cooperative, foundation, religious association, or other forms as provided by legislation. An NPO may carry out one or more types of activities that are not prohibited by the laws of the Republic of Kazakhstan and that correspond to its chartered objectives. The income from the entrepreneurial activities of an NPO is directed exclusively to its chartered purposes and is not distributed among its members.

Institution

An Institution is an organisation established and financed by its founder to perform managerial, socio-cultural, or other functions of non-commercial nature. Depending on the form of ownership, institutions are divided into public and private:

  • A Private Institution (PI) is an organisation that is not part of the state structure, created by individuals and (or) non-state legal entities for the implementation of managerial, socio-cultural or other functions of a non-commercial nature.
  • A state institution shall be an institution established by the state in accordance with the Constitution of the Republic of Kazakhstan and laws thereof or legal acts of the President, the Government, and local executive bodies of regions, cities of republican significance, the capital, districts, cities of regional significance, as well as offices of akims of cities, villages, settlements, rural districts and maintained only at the expense of the state budget

Foundation

Foundation is an NPO without any membership, which is founded by citizens and (or) legal entities on the basis of their voluntary property contributions, and which pursues social, educational, and any other publicly useful purposes. Foundations can be private, corporate, public, and state, depending on the composition of the founders and activities performed. Segmented by activities, foundations can be social, charitable, cultural, educational, and other.

  • A private foundation is a foundation established by one individual or individuals - members of the same family at the expense of his (their) own foundation. A private foundation can also be created by a notarised will of an individual.
  • A Corporate Foundation is established by one or several legal entities, commercial and (or) non-profit organisations at the expense of these organisations.

Features of functioning of non-profit organisations

Foundation is an NPO without any membership, which is founded by citizens and (or) legal entities on the basis of their voluntary property contributions, and which pursues social, educational, and any other publicly useful purposes. Foundations can be private, corporate, public, and state, depending on the composition of the founders and activities performed. Segmented by activities, foundations can be social, charitable, cultural, educational, and other.

  • A private foundation is a foundation established by one individual or individuals - members of the same family at the expense of his (their) own foundation. A private foundation can also be created by a notarised will of an individual.
  • A corporate foundation is established by one or several legal entities, commercial and (or) non-profit organisations at the expense of these organisations.

Private Institution vs Corporate Foundation - What's the Real Difference?

Name and location of the non-profit organisation

The name of a Private Institution (PI) includes its name and an indication of its organisational and legal form. It may include additional information provided for by law. In terms of naming, it is not allowed to use names that contradict the requirements of legislation or norms of public morality, or own names of persons if they do not coincide with the name of the participants or if the participants have not obtained the permission of these persons (their heirs) to use their own name. The location of a PI is the location of its permanent body. The name and location of a PI shall be indicated in its constituent documents.

The name of a Corporate Foundation (CF) includes its name and an indication of its legal form. It may include additional information provided for by law. It is not allowed to use names that contradict the requirements of the legislation or norms of public morality or use the own names of individuals if they do not match the name of the participants or if the participants have not obtained the permission of these individuals (their heirs) to use their own name. The location of a CF is the location of its permanent body. The name and location of a CF shall be indicated in its constituent documents.

Types of Activities

Private Institutions may carry out activities that are not prohibited by the legislation and correspond to their objectives, which are provided for in their constituent documents. Corporate Foundations may also carry out activities that are not prohibited by the legislation and correspond to their objectives, as stated in their constituent documents.

Founders

The founders of a Private Institution may be individuals and (or) non-governmental legal entities unless otherwise established by legislative acts. The founders of a Corporate Foundation may be one legal entity or several legal entities—commercial and (or) non-profit organisations unless otherwise established by legislative acts.

Constituent Documents

The constituent documents of a Private Institution include a regulation (charter) approved by the owner(s) and the decision of the owner(s) to establish a legal entity. The constituent documents of a Corporate Foundation include the charter approved by the founders and the memorandum of association.

Charter

The charter of a Private Institution shall contain:

  • the name, including the organisational and legal form
  • the subject and objectives;
  • location;
  • the structure formation procedure and competence of the governing bodies;
  • rights and obligations of members (participants);
  • conditions and procedure for admission to membership and withdrawal from it (if there is any);
  • sources of formation of the property; the procedure for making amendments and additions to the constituent documents;
  • conditions of reorganisation and termination; the procedure for the use of property in case of liquidation;
  • and information on branches and representative offices.

Similarly, the charter of a Corporate Foundation contains

  • the name, including the organisational and legal form, the subject and objectives;
  • location;
  • the structure, formation procedure and competence of the governing bodies;
  • sources of formation of the property;
  • the procedure for making amendments and additions to the constituent documents;
  • conditions of reorganisation and termination;
  • procedure for the use of property in case of liquidation;

information on branches and representative offices.

Property

The property of a Private Institution is assigned to it on the right of operational management. The sources of formation of the property in monetary and other forms, in accordance with legislative acts, are:

  • receipts from founders (participants, members);
  • voluntary property contributions and donations;
  • mandatory property contributions in cases provided by the laws;
  • receipts (income) from the sale of goods, works, services in cases provided by the legislation;
  • dividends (income, remuneration (interest)) received on shares, bonds, other securities and deposits;

and other receipts not prohibited by law.

A PI does not have the right to alienate independently or otherwise dispose of the property assigned to it and the property acquired at the expense of funds allocated to it according to the estimate. The owner of the property assigned to a PI or a state enterprise has the right to withdraw this property or redistribute it among other legal entities created by it at its own discretion unless otherwise established by legislative acts.

The property transferred to the foundation by its founders becomes the Corporate Foundation's property. The founders do not have property rights to the CF’s assets and may be excluded from the foundation by a general meeting of founders for failure to fulfill obligations following the procedure established in the charter. The property of a CF is formed through one-time or regular contributions from one or more legal entities which can be either commercial or non-profit organisations (founders). A CF is obliged to conduct financial audits within the time frame specified by its charter. These audits are carried out by an auditor or an auditing organisation. The procedure for selecting the auditor is determined by the charter, and auditing organisations are engaged in accordance with the legislation. A CF is required to publish asset reports annually on its internet resources or in periodical print publications distributed throughout Kazakhstan.

Governing Bodies

The highest governing body (general meeting, congress, conference, founder, board of trustees) of a Private Institution has the right to make decisions on any issues related to PI activities. The exclusive competence of the highest governing body of a PI includes the following issues:

  • adoption of amendments and additions to the constituent documents;
  • voluntary reorganisation and liquidation;
  • determination of the competence, organisational structure, and procedure for forming and terminating the powers of the governing bodies;
  • determination of the procedure and frequency of submission of financial statements by executive bodies as well as the procedure for auditing by the control body and approval of its results;
  • and adoption, within the limits established by legislative acts, of decisions on the participation in the creation or activities of other legal entities, its branches, and representative offices.

Other issues of the organisation's activities may also be included in the exclusive competence of the highest governing body by the founding documents in accordance with legislative acts.

The highest governing body (general meeting, congress, conference, founder, board of trustees) of a Corporate Foundation also has the right to make decisions on any issues related to CF activities. The exclusive competence of the highest governing body includes the following issues:

  • adoption of amendments and additions to the constituent documents;
  • voluntary reorganisation and liquidation;
  • determination of the competence, organisational structure, and procedure for forming and terminating the powers of the governing bodies;
  • determination of the procedure and frequency of submission of financial statements by executive bodies as well as the procedure for auditing by the control body and approval of its results;
  • and adoption, within the limits established by legislative acts, of decisions on the participation in the creation or activities of other legal entities, its branches, and representative offices.

Other issues may also be included in the exclusive competence of the highest governing body by the founding documents in accordance with legislative acts.

Executive Body

The executive management body (collegial or individual) of a Private Institution executes operational control, except for matters that are within the exclusive competence of the highest governing body as specified by the founding documents. The control body (audit commission, auditor) is elected or appointed by the PI governing bodies. Other issues of PI activities may also be included in the exclusive competence of the highest governing body by the founding documents in accordance with legislative acts.

The executive body of a Corporate Foundation operates based on and in execution of the decisions of the highest governing body and the permanent collegial governing body of the foundation (board of trustees) and is accountable to them. The head, based on the founding documents and decisions of the foundation's governing body, has the right to conclude transactions on behalf of the foundation. The head of the foundation has the right to represent the foundation in court, government bodies, and other organisations without the power of attorney. The head and members of the executive management body of the foundation are jointly liable to compensate the foundation for losses caused by decisions made in violation of the foundation's founding documents and the legislative acts. Individuals who voted against, abstained from, or did not participate in the meeting where such a decision was made are exempt from the obligation to compensate for losses. The foundation must have a head and an accountant who are not related by marriage, close kinship, or affinity. The same person cannot hold both positions. The charter of the foundation may specify the areas of activity for other authorised persons who may act independently and conclude transactions.

The List of Required Documents

The list of required documents for the registration of a Private Institution includes

1)   Application for Registration;

2)   Founder’s Resolution on the Establishment of the Institution;

3)   Articles of Association (2 copies) in the Kazakh and Russian languages;

4)   Notarised Copy of the Passport/Identity Document of the General Director/Director;

5)   Document Confirming the Legal Address (Confirmation Letter from the Landlord);

6)   Certificate of Registration or Extract from the Commercial Register;

7)   Notarised Copy of the Charter/Articles of Association of the Founder or Other Document of Establishment;

8)   Receipt or Other Document Confirming Payment of the State Registration Fee for Legal Entities and the Registration Fee for Branches and Representative Offices;

Documents should be apostilled, notarised, and translated into Kazakh and Russian with notarisation.

The list of required documents for the registration of a Corporate Foundation includes:

1)   Application for Registration;

2)   Charter (2 copies) in the Kazakh and Russian languages;

3)   Decision of the Authorised Body Approving the Charter;

4)   Decision of the Collegial Body (Board of Trustees) Appointing the Executive Body;

5)   Notarised Copy of the Passport/Identity Document of the General Director/Director;

6)   Document Confirming the Legal Address (Confirmation Letter from the Landlord);

7)   Certificate of Registration or Extract from the Commercial Register;

8)   Notarised Copy of the Charter/Articles of Association of the Founder or Other Document of Establishment;

9)   Receipt or Other Document Confirming Payment of the State Registration Fee for Legal Entities and the Registration Fee for Branches and Representative Offices;

Documents should be apostilled, notarised, and translated into Kazakh and Russian with notarisation.

The Registration Body

The registration body for both a Private Institution and a Corporate Foundation is the Ministry of Justice of the Republic of Kazakhstan territorial bodies of justice or the Non-profit Joint Stock Company "State Corporation Government for Citizens."

The Registration Fee

The registration fee is 65 MCI (Monthly Calculated Index), which is 23,998 tenge. MCI is equivalent to 3,692 tenge.

The Registration Period

The registration period for both a Private Institution and a Corporate Foundation is no later than 5 working days following the day of submission of the application with the required documents. At the location of the service provider, the period is no later than 10 working days outside the location of the service provider following the day of submission of the application with the required documents attached.

The Results of Registration

The result of registration for both a Private Institution and a Corporate Foundation is the issuance of a certificate of state registration.