"Non-profit organizations in Honduras"

To analize the current legal status of a non-profit organization in Honduras, apart from reviewing the legal documents of the organization it is important to verify the legal status at the Civil Associations' Monitoring and Registry Unit (in Spanish, Unidad de Registro y Seguimiento de Asociaciones Civiles -URSAC).

It

1. Is in Good Standing with local tax authorities:

In Honduras, the authority in charge of tax affairs is the Executive Income Office (in Spanish, DEI) and among the reviewed documents there is a Proof of Solvency issued by this office (DEI). It confirms that the association is in good standing with its tax obligations until the date indicated in the certificate.

2. Has granted sufficient authority to their representative bind the organization:

Bylaws of the association are duly approved and registered; these set forth that the Chair of the Board of Directors is the Legal Representative of the association with sufficient and ample powers to manage it.

The Chair of the Board is Mr. FREDY EBERTO GARMENDIA for the period of December 27, 2009 – December 27, 2012.

3. Has no pending material litigation:

There is no document certifying that there is no pending litigation. A sworn statement of the Chair of the Board must attest it.

4. Bylaws include:

  1. Evidence of a conservation purpose: The bylaws state that the association is of indefinite term and can only be dissolved by the agreement of the two third of its members.
  2. Evidence of not-for-profit status: Its bylaws states it is a not-for-profit association. The actual status must be confirmed by means of a certificate issued by the Ministry of Finance.
  3. Internal and external conflicts of interest policy: The bylaws do not establish any internal and external conflicts of interest policy.
  4. Adequate provisions regarding asset transfer on liquidation or dissolution of the organization: The bylaws set forth that, in case of dissolution, the balance will be transferred to a legally incorporated organization in Honduras which meets similar purposes or to a charitable association once their pending obligation are cancelled.

A. Generic list of documents:

1. Bylaws ("Estatutos de la entidad, certificados por un Notario o Abogado como siendo los documentos vigentes al momento de la donación"):

Accomplished

2. Power of Attorney of the proposed representative ("Certificación legal del apoderado de la entidad que firmará la donación (puede ser el Presidente, Director Ejecutivo, Gerente, etc."):

Accomplished by a certificatie confirming his appointment as Chair of the Board and Legal Representantive of the association, not a POA.

3. Sworn statement regarding no litigation ("Declaración Jurada emitida por el representante de la entidad, donde se manifieste que no hay procesos administrativos, juicios ni litigios pendientes en contra de la entidad, o en caso de existir juicios o litigios pendientes, una descripción de estos con referencia al nombre de la contraparte, resumen de la demanda, naturaleza y monto o posible monto total de la responsabilidad civil de la entidad.):

The sworn statement does not meet these requirements and must be modified as stated above in A.3.

4. Certificate of charitable status (Certificado de exención de impuestos o autorización para recibir donaciones deducibles de impuestos emitida por la autoridad tributaria del país de origen de la entidad):

Although the bylaws indicate that it is a not-for-profit association, no certificate of charitable status has been sent. This status is proved by the certificate of registration of the association as a not-for-profit organization before the Ministry of Finance and by the resolution issued by DEI certifying their tax exemption status.

5. Certificate of good standing (Certificado de cumplimiento con impuestos locales, nacionales y federales, si aplica y existe este certificado en el país de origen):

It has been sent a proof of solvency issued by DEI, which proves the good standing of the association regarding national taxes until the date indicated in the certificate.

They must send the certificate of the Central District Town Hall (In Spanish, Municipalidad del Distrito Central) to prove the good standing of the association in respect with Municipal taxes.

B. Documents that must be requested from the association:

  1. Copy of the certificate of not- for-profit association issued by the Ministry of Finance;
  2. Copy of the resolution issued by DEI certifying that the association is tax exempted;
  3. Certificate of good standing issued by Central District Town Hall;
  4. Sworn statement of the Chairman of the Board stating there is no pending material litigation as required above, duly authenticated by Notary Public;
  5. National Tax Registry (in Spanish, Registro Tributario Nacional -RTN) of Mr. FREDY EBERTO GARMENDIA, Chairman of the Board;
  6. Bank's reference letter;
  7. Financial Statements and Balance Sheet issued by a chartered accountant.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.