What are NGOs (Non-Governmental Organizations) and what role do they play in civil society?

🔗 See the German and Romanian versions as well.

Non-Governmental Organizations (NGOs) are private legal entities, independent of the state, which can make their own decisions and are legally responsible for them. They are established to support a cause of general or collective interest, as well as to meet non-pecuniary needs of their members. If you intend to establish an association or a foundation for the purpose of conducting non-profit activities, we invite you to go through the steps for setting up and operating an NGO.

Main Characteristics of NGOs:

• They have an organized structure and operate as legal entities;
• They are institutionally independent from the state;
• They are non-profit – their revenues are not distributed to administrators or other individuals;
• They are self-managed – they autonomously make decisions and run their activities;
• They are based on voluntarism – membership is not mandatory by law, and support may come through donations or voluntary involvement.

Fields of Activity

The importance of NGOs can be seen in various fields such as education, healthcare, environmental protection, animal welfare, human rights, cultural heritage protection, workforce development, and consumer protection. NGOs also contribute to the development and support of communities.

In education, NGOs facilitate access to schooling for vulnerable groups by offering scholarships, mentoring programs, or educational resources. In healthcare, many NGOs provide free medical services, prevention campaigns, and support for people with chronic illnesses.

Environmental protection is another important sector where NGOs carry out greening projects, ecological education, and advocacy for sustainable policies.

In the labor sector, NGOs are involved in protecting employees’ rights, promoting fair working conditions, and supporting professional retraining for the unemployed. They also support social entrepreneurship and the development of necessary labor market skills.

Regarding consumer protection, NGOs act to uphold consumers’ rights, provide assistance in cases of abusive commercial practices, and promote transparency between consumers and companies.

Legal Framework for the Establishment and Operation of NGOs

In Romania, the establishment of an NGO must comply with the provisions of Government Ordinance no. 26 of January 30, 2000, regarding associations and foundations (“OG 26/2000”).

Both associations and foundations can be considered NGOs, as they are private legal entities without profit-making purposes.

Formation and Registration of an Association

An association is a private legal entity formed by three or more individuals who, based on an agreement, pool together their material contributions, knowledge, or work efforts, without the right to claim them back, to carry out activities of general, community, or personal non-pecuniary interest.

To acquire legal personality, the founding members must conclude the association’s statute through a private deed. Under penalty of absolute nullity, the statute must include:

• The will to associate and the purpose and objectives of the association;
• The name of the association;
• The headquarters;
• The duration of the association’s activity;
• The initial patrimony. If contributions in kind involve immovable assets, the statute must be authenticated by a notary;
• The nominal composition of the first managing, administrative, and control bodies of the association;
• The method of administration;
• Other essential elements.

Association’s Statute

The statute details the operational rules of the association, including the rights and obligations of members, the organizational structure, and internal procedures.

Establishing and registering a foundation

A foundation is a legal entity created by one or more persons who, through a legal act (an act between living persons or for a cause of death), establish a dedicated, permanent, and irrevocable patrimony for a general or community interest purpose.

To obtain legal personality, the foundation must meet the following conditions:

• Statute: The founder(s) must draft the foundation’s statute through a private act. The statute must, under the penalty of absolute nullity, include the following elements:
  • Identification data of the founder(s);
  • The purpose and objectives of the foundation;
  • The name and registered office of the foundation;
  • Duration of the activity (either fixed-term or indefinite);
  • Initial patrimony of the foundation;
  • Composition of the governing, administrative, and control bodies;
  • Procedure for the appointment and modification of the components of the governing, administrative, and control bodies;
  • Initial capital: The foundation must have initial capital, which may include assets in kind or in cash. The total value of this capital must be at least ten times the national minimum gross salary at the time of the foundation’s establishment.

In the context of non-governmental organizations (NGOs) in Romania, associations and foundations are two distinct legal forms, each with its own characteristics. Essential differences:

The choice between establishing an association or a foundation depends on the nature of the desired activity and the preferred governance structure.

Organization and Operation of Associations and Foundations in Romania

The main bodies of an association are:

• General Assembly: The supreme governing body, composed of all the members of the association.
• Board of Directors: The executive body responsible for the day-to-day administration of the association.
• Censor or Censorship Committee: The financial control body, designated to audit the financial and accounting activities of the association.

The General Assembly has competencies such as:

• Establishing the strategy and general objectives of the association.
• Approving the budget and financial statements.
• Electing and dismissing members of the board of directors and the censor or censorship committee.
• Establishing branches.
• Amending the association’s statute.
• Dissolving the association and liquidating its assets, as well as determining the destination of remaining assets after liquidation.
• Any other duties provided by law or the statute.

The Board of Directors ensures the execution of the General Assembly’s decisions and has responsibilities such as:

• Managing the association’s assets.
• Preparing the annual activity report and financial statements.
• Hiring and firing staff.

The Censor or Censorship Committee’s role is to verify the legality and regularity of the association’s financial operations, ensuring transparency and correctness in the management of funds.

The main bodies of a foundation are similar to those of an association:

• Board of Directors: The executive body responsible for the day-to-day administration of the foundation.
• Censor or Censorship Committee: The financial control body, designated to audit the financial and accounting activities of the foundation.

The Board of Directors has the following responsibilities:

• Establishing the general strategy and programs of the foundation.
• Approving the budget and financial statements.
• Electing and dismissing the censor or, if applicable, the members of the censorship committee.
• Establishing branches.
• Concluding legal acts on behalf and in the name of the foundation.
• Executing the budget of revenues and expenses.
• Approving the organizational chart and personnel strategy of the foundation.
• Amending the foundation’s statute.
• Carrying out any other duties stipulated by law or the statute.

As with the association, the Censor or Censorship Committee’s role is to verify the legality and regularity of the foundation’s financial operations, ensuring transparency and correctness in the management of funds.

We believe that these regulations provide a clear legal framework for the organization and operation of associations and foundations, promoting transparency, responsibility, and efficiency in resource management and achieving their goals.

Tax Registration

Another important aspect of nonprofit entities’ operation is tax registration. Associations and foundations are required to submit the tax registration form to the fiscal authority in whose territorial jurisdiction their headquarters is located.

Nonprofit organizations must comply with tax obligations and ensure financial transparency.

Legislative Challenges and Obligations

In the context of technological development and the increasing number of online activities, NGOs face new challenges and regulations aimed at ensuring compliance with current legislation.

However, starting in 2025, NGOs will be exempt from the obligation to submit the Standard Audit File for Tax (SAF-T), according to a recent ANAF project.

Regarding the prevention of money laundering, NGOs may be vulnerable to money laundering and terrorist financing risks, especially when managing significant funds or operating in high-risk areas.

To prevent such situations, legislation imposes reporting and transparency obligations, as well as the implementation of internal compliance policies.

You may also be interested in other topics: How to recover a debt: Legal steps to obtain payment from your debtor.

Setting Up an NGO: Are You Ready to Meet the Legal Requirements?
Establishing an NGO involves navigating a complex process, and failing to comply with legal procedures can lead to delays or even rejection of your application. Make sure your organization starts on a solid, legally compliant foundation.
A specialized lawyer can assist you with:
✅✅ Drafting and reviewing the articles of incorporation and bylaws
✅ Obtaining name reservation and proof of registered office
✅ Advising on compliance with legal requirements to avoid risks
✅ Filing the registration application and representing you before the competent authorities
Don’t leave legal matters to chance! Ensure that your organization benefits from the necessary legal protection.
Contact us now for a customised legal consultation!