Print LAW ON FOUNDATIONS AND FUNDS
1998
1. BASIC PROVISIONS
Article 1
This law stipulates: founding, activities, management, organization and termination of foundations and funds which are of interest to Bosnia and Herzegovina Federation (hereinafter called Federation), its organs, i.e. Bosnia and Herzegovina, and supervision upon operation of these foundations and funds.
Article 2
In the sense of this law, a foundation is a property meant, for a certain period of time, to serve to realization of some generally useful or humanitarian purposes of interest to Federation, namely Bosnia and Herzegovina.
Generally useful purpose in the sense of this law, is a purpose which is considered to be one the fulfillment of which yields a general improvement of cultural, educational, scientific, spiritual, sports, medical, environmental and other social activities, as well as organization of work and other activities in the domain of economic development, restoration and reconstruction of Federation.
Humanitarian purpose in the sense of this law is such a purpose the fulfillment of which provides support to persons who need help.
Article 3
In the sense of this law, a fund is a property meant to, alone or by incomes incurred by this property, continuously serves to enable realization of some generally useful or humanitarian purposes.
Generally useful purpose of a fund is achieved in accordance with paragraph 2, article 2 of this law.
Purpose of a fund is generally useful, namely humanitarian, although it concerns only persons who belong to certain classes, vocation, national, linguistic, cultural, scientific or religious group or similar, to a certain number of persons, namely persons who are living at certain areas or who are encompassed by activities of a fund, an institution or any other legal entity.
Article 4
A foundation and a fund are legal entities.
Article 5
The issues pertaining to founding, activities, management, organization and termination of foundations and funds of the interest for a canton and its organs, will be stipulated by a cantonal law.
II. FOUNDING, ACTIVITIES, MANAGEMENT AND ORGANIZATION OF FOUNDATIONS OF THE INTEREST FOR FEDERATION AND ITS ORGANS
1. Founding and seat of a foundation
Article 6
A foundation is founded by Bosnia and Herzegovina Government (herinafter Government) at the proposal by federal minister to whose area of responsibility belongs the operation of a foundation which is being founded.
At the consent of Government, a foundation can be founded by domestic and foreign legal entities and persons.
Government cannot refuse issuance of endorsement if all conditions stipulated by this law are met.
A foundation has administrative, technical and financial independence.
Seat of a foundation must be within territory of Federation.
2. Activity of foundation
Article 7
Activities of a foundation can be: provision of employment for unemployed persons through consultations and findings jobs, retraining, performance of public works, projects and programmed of restorations and reconstructions, information, training of personnel, transfer of technologies and counselling work related to main activities of a foundation and other activities in accordance with special projects and programms in all economic and social activities important for restoration and reconstruction at the Federation territory.
3. Foundation incomes
Article 8
Foundation income are composed of resources obtained from multi-lateral or bi-lateral programms of assistance, investments secured by Bosnia and Herzegovina and Federation, domestic and foreign donations and other sources of financing.
4. Foundation statute
Article 9
A foundation has a statute.
A foundation statute contains especially:
1. Name and seat of a foundation,
2. Data on founding and basic assets and purposes of a foundation,
3. Methods of using its incomes,
4. Provisions about management organs of a foundation, procedures for their appointment and dissolving, as well as responsibilities for the work by their members,
5. Provisions about authorizations of foundation organs and their work,
6. Provisions about reporting about work and financial operations of a foundation,
7. Provisions about changing the purpose of outstanding assets in case of termination of a foundation,
8. Provisions about passing documents and their publishing and other provisions which are of interest for organization and method of work of a foundation.
Statute must be in accordance with this law and regulations by Government.
Authorization to statute of a foundation is given by Government in case when the Government is its founder.
Article 10
Foundation organs are board of representatives and executive board.
Board of representatives is a management board which consists of a president and certain number of members.
When the Government is a founder, a president and members of board of representatives are appointed by the Government.
When a person or a legal entity, as stipulated in article 6, paragraph 2 of this law are founders, the board of representative is appointed by the founder.
President of board of representatives is a federal minister or his deputy or a person appointed by the minister or his deputy.
Members of board of representatives are representatives of federal ministries and other institutions appointed by the Government at personal by relevant federal minister in foundations founded by the Government.
Article 11
Board of representatives carries out especially the following duties: passes a constitution and operational plans, establishes business policy, strategy and programme of development, decides about distribution and use of resources, passes an annual balance of income and carries out other duties defined by foundation statute.
Article 12
Executive board is an executive organ of a foundation which is composed of persons appointed by the Government at the proposal by a relevant federal minister, when the Government if a founder.
In cases quote in article 10, paragraph 4, an executive board is appointed by a board of representatives.
Statute, authorizations, mandate, method of decision-making, responsibilities and other issues of interests to functioning of the board are defined in accordance with this law.
6. Registration of a foundation
Article 13
A foundation is enrolled in a register.
Register of all foundations which are founded in accordance with this law is kept by Federal Ministry of Justice (hereinafter Ministry of Justice).
A foundation commences to function with the day of entry into register, as stipulated in paragraph 2 of this article.
7. Termination of a foundation
Article 14
A foundation terminates with functioning when the purpose of its founding terminates, the decision which is taken by the Government at the proposal by Federal Minister of Justice whose responsibilities include the foundation activities, namely at the proposal by a body which is defined by a foundation founder in constitution.
8. Supervision of foundation activities
Article 15
Supervision upon foundation activities is carried out by a federal ministry in whose domain are activities of a foundation and Federal Ministry of finances, each of them for issues from its domain of authorization.
Article 16
A foundation submits an annual report on its activities to the Government.
III FOUNDING, ACTIVITIES AND MANAGEMENT OF AN FUND OF INTEREST FOR FEDERATION AND ITS ORGANS
1. Founding of a fund
Article 17
A fund can be founded by a person or a legal entity from Bosnia and Herzegovina or a foreign person or a legal entity (hereinafter: fund founder).
A fund founder who intends to found a fund of the interest to Federation or its organs of federal institutions, passes a document on founding of a fund.
Article 18
If a fund is founded by a single founder, such a fund is founded by a statement about founding of fund (decision, last will and similar). If a fund is founded jointly by a number of persons, a document about founding is made in a form of a contract.
A document about founding must contain:
1. expression of wish by the founder that certain assets are permanently meant for founding a fund,
2. information which precisely defines assets intended for fund purposes (basic assets) with an appraisal by a court expert about its value and anticipated incomes which it could render,
3. definition of generally useful and humanitarian purposes of a fund.
A document about founding a fund must be make in a written from and can contain a clause on a director of a fund as well as other clauses which must be contained in fund’s statute.
If a fund is established during the life of the fund founder, the signature of the founder at such a statement must be verified at the court or at other authorized organ.
If a fund is founded in cases of death of the founder, a statement about its founding must be in a form of statement of the last will.
Article 19
Founding of a fund is allowed:
1. if a document about founding was made in accordance with provisions of article 18 of this law;
2. if purpose of a fund is generally useful or humanitarian and,
3. if assets of a fund are sufficient for permanent fulfillment of purpose of the fund.
Assets of a fund are not sufficient for permanent fulfillment of purpose of the fund should its anticipated incomes permanently or for a long time enable only keeping of these assets, especially imovables, but not realization of immediate purpose of the fund.
Founding of a fund is nor allowed:
1. if purpose of a fund is impossible or if it legally or morally inadmissible,
2. if there is no reasonable reason for founding a fund or if a purpose of a fund obviously would not be serious.
Article 20
Fund founder can disapprove a document on founding a fund until the time he is not presented a decision which provides him a license for founding a fund.
The successor of a founder can deny his statement of the last will about founding a fund in accordance with the regulations about denial of a will. Statement on denial must be submitted during presenting their succeeding statement at the latest, namely immediately after they have learned about the last will of the founder about founding a fund.
If a document about founding was made by a number of persons, individual founders can deny this document by a legal lawsuit on the basis of reasons which make it deniable in accordance with general rules of obligation rights. A lawsuit can be submitted to the court before submittance of a document on founding a fund to Ministry of Justice.
If a document about founding was denied on time, namely if a lawsuit for its denial is filed on time, Ministry of Justice cannot take a decision which will allow founding of a fund until termination of this lawsuit. If a lawsuit for denial of document about founding a fund is timely refused, Ministry of Justice will take a decision on permitting founding a fund.
A document about founding a fund can be also denied by creditors in accordance with general legal proceedings on disapproving legal actions. Initiation of court proceedings for disapproval does not stop founding of a fund.
In order to secure rights of a fund, i.e. rights of other co-founders, a court, during court proceedings, using its official capacity or at the request by Ministry of Justice or other co-founders, can introduce temporary security measures.
Article 21
If a statement about founding a fund is made by a will a probate court will inform Ministry of Justice about it, which, if the conditions for founding a fund are met, will take a decision on issuing a license for founding a fund based on the will. If Ministry of Justice refuses to issue such a license, it will be considered that such a fund was not founded.
Article 22
Tasks related to founding and other tasks of interest for functioning of a fund, stipulated by this law, will be caried out by Ministry of Justice.
Article 23
Decision on license for founding a fund is taken based on a written request by a fund founder.
If a fund founder is a legal entity or a person, who at the time of founding a fund is alive, a document on founding, along with a request for its founding, is submitted to Ministry of Justice. A request for founding is submitted in two copies on a special form. Submitter of a request is obliged to enclose proofs necessary for founding a fund, as quoted in article 18 of this law.
Enclosures can be original, transcripts or copies. If they are submitted as transcripts or copies which are not court verified, a court official will ascertain whether copies or transcripts are true to the original.
A form for a request and enlosures which should be submitted along with the request as quoted in paragraph 2 of this article, are defined by federal minister of justice.
Article 24
Ministry of Justice is obliged to pass a decision on issuance of license for founding a fund within 60 days from the day of submittance of a proper request for founding a fund.
Decision from paragraph 1 of this article contains: name and seat of a fund, purpose of a fund with indication of circle of persons towards which the purpose of fund is to be realized, name and family name of a person, i.e. name of a fund body authorized to represent the fund and other relevant information stipulated by provisions of this law, as well as provision that a fund cannot enter into legal arrangements unless Ministry of Justice approves its statute first.
After the decision on issuance of license for founding a fund becomes legitimate, Ministry of Justice will officially enter a fund into a fund register.
A fund founder, namely provisional Manager of a fund can initiate a lawsuit at the Federation supreme court, against the decision which does not allow founding of a fund.
Article 25
Upon receipt of a request for founding a fund, Ministry of Justice will without delay appoint a person who will take care of assets upon which a fund is being founded, until termination of a lawsuit.
Person from paragraph 1 of this article will be appointed by Ministry of Justice, should a fund founder not do it himself.
Provisional manager can be a person who was appointed as a manager in the document on founding a fund, and if there is no provision in that document for manager, a provisional manager will be appointed by Ministry of Justice.
2. Name of a fund
Article 26
The name of a fund will be determined by a fund founder. The name of a fund should be such as to easily differ from the name of already registered funds. The name of a fund should contain the word "Fund" or other correspondent word (for example, "vakuf").
The name of a fund can also contain a name of certain person or legal entity and indication of the purpose of a fund.
If a fund founder did not designate the name for a fund, the name of a fund will be designated by the Ministry of Justice.
If a person or a legal entity, whose name appears in the name of a fund is not a fund founder, his name can be entered into the name of a fund only with the consent of that person or his successors. Agreement to this effect is given in a written form which is verified at the court.
3. Seat of a fund
Article 27
Seat of a fund must be in Federation. The seat of a fund will be the place which is specified in a document on founding.
The seat of a fund will be the seat of its managing boards.
4. Fund assets
Article 28
Basic assets of a fund represent assets which a fund founder has assigned to a fund in the document on founding, the value of which must not be decreased or lost by realization of fund’s purposes. These assets become the property of a fund by registration of a fund in register of funds. Ministry of Justice can, directly or through provisional manager, before registration of a fund in the register of funds, undertake actions to protect basic assets in front of relevant bodies.
The assets of a fund include assets which a fund has acquired through economic utilization of its assets (for example, rent, leasing, income, interest rates, dividends, forest and other types of land), endowments, donations and similar. For the sake of acquiring assets, a fund can organize certain activities (charity gatherings, lottery, manufacture and sale of brochures, emblems, badges and similar).
Assets of a fund can be situated abroad.
Financial resources which form a part of assets of a fund must be brought to Federation and must deposited to the fund account.
Assets of a fund can be used only for achieving purposes for which a fund is founded.
Immovables, entered into a fund as its capital or bought from the interest rates for the sake of achieving purposes of a fund or increasing its financial base, must not be alienated (sold or exchanged) to the detriment of already obtained financial base and purpose of the capital.
Article 29
Federation can be a founder or co-founder of a fund only based on special federal law.
5. Statute of a fund
Article 30
Statute of a fund must especially contain:
1. name and seat of a fund,
2. information about founding and basic assets of a fund,
3. provisions regarding purpose of a fund, utilization of its incomes, namely the circle of people who are assisted by the fund and the method of approving this assistance,
4. provisions about managing body and representation of a fund, and provisions about methods of its appointment and dissolving, as well as responsibilities for the work of members of that body,
5. provisions about authorizations of managing bodies and representing a fund, about fund’s council as well as its rights to awards for the work which they are carrying out as well as reimbursement of costs,
6. provisions on reporting about work and informing Ministry of Justice and Federal Ministry of Finance about financial and property status of a fund,
7. provisions on legal activities for which it is necessary to obtain outhorization, namely additional authorization by Ministry of Justice.
8. provisions on changing the purposes of the outstanding assets in cases of termination of a fund,
9. other provisions, in accordance with a document on founding, which are necessary for successful organization and activities of a fund.
Ministry of Justice will issue its approval regarding the statute of a fund.
A fund manager is obliged, within 30 days of appointment, to submit a fund’s statute for approval to Ministry of Justice.
6. Managing a fund
a) Fund’s manager
Article 31
If fund founder did not appoint a manager, he will be appointed by Ministry of Justice by its decision taking into a account the motives and interests involved in founding a fund.
Article 32
Fund’ manager is especially obliged;
1. to take over, namely, gather all fund’s assets and manage and represent the fund if undertaking of certain actions or legal activities related to the fund have not already been left to Ministry of Justice by this law,
2. propose fund’s statute,
3. propose to Ministry of Justice the persons for the first appointment of managing body and representing a fund who are stipulated by the fund’s statute.
b) Fund’s managing body
Article 33
Managing body manages a fund and its members will be appointed for the first time by Ministry of Justice among the persons who were recommended by Fund’s manager along with approval by fund founder.
Persons recommended for members of a managing body must previously give their written and verified agreement and must be capable and trustworthy, given their expert knowledge, previous experience and conduct and cannot belong to a circle of people to whom the purposes of a fund are intended and cannot be employees of Ministry of Justice and members of fund’s council.
On the day effectiveness of the decision on appointment of fund’s managing body, all authorizations of fund’s manager cease and managing the fund will be taken over by the appointed fund’s managing body.
A special protocol and initial fund’s financial balance sheet will be made at the moment of taking managing over the fund between the manager and newly appointed fund’s managing body based on manager’s report and revision made by authorized persons. Ministry of Justice will issue the manager with a discharge notice.
c) Fund’s council
Article 34
Fund’s council is the highest expert and counselling body which:
1. debates about the status of fund and establishes proposals and directions regarding these issues,
2. debates and gives proposals and ideas about issues which relevant federal ministers place in front of fund’s council,
3. gives opinions and proposals concerning implementation of this law as well as about other regulations which are used to regulate the issues of a fund, and,
4. decides about other issues stipulated by this law and fund’s statute.
Article 35
Fund’s council has a president and a certain number of members who are appointed among experts from certain field in which a fund is founded and prominent persons and benefactors.
President and members of a fund’s council are appointed by the Government upon proposal by federal minister. The appointment document will specify the number of fund’s council.
Mandate of members of fund’s council is four years.
7. Termination of a fund
Article 36
A fund terminates:
1. if a fund loses its assets,
2. if its assets cease to be sufficient for continuous fulfillment of purposes of a fund and if there are no conditions for transformation of a fund into a foundation, but the purposes of a fund can be achieved through termination and transfer of fund’s assets to some other fund which serves this of similar purpose, and,
3. if purpose of a fund ceases to be generally useful or humanitarian or if its achievement has become impossible or morally or legally inadmissible.
Article 37
Termination of a fund is to be decided by Ministry of Justice at the proposal of fund’s managing body or by official duty. In the procedure of terminations the partes are fund founder i.e. his successors and a representative of a fund.
In the decision on termination of a fund, Ministry of Justice will appoint a representative who will immediately take management and representation over a fund.
Article 38
A representative of a fund is authorized to carry out taking over of fund’s assets, books and other documents from former fund’s body about which separate protocols will be made. If former fund’s bodies refuse to participate in taking over, namely if they do not respond to representative’s invitation, a representative will make a protocol about taking the assets and archives over. A copy of a protocol, namely taking the assets over be submitted to Ministry of Justice.
Ministry of Justice will, at the proposal by a representative or officially, decide whether court proceedings or other proceedings should be initiated against members of former fund’s bodies.
Article 39
Decision on termination of a fund will specify who will take the rest of fund’s assets.
Fund’s assets will be transferred, in accordance with their previous written consent, to persons or legal entities it should belong to in accordance with a document on founding a fund or its statute, in case of termination of a fund, if this is not possible, to another fund with similar purposes of fund. If this is not possible, fund’s assets will be assigned to some generally useful and humanitarian purpose fund which is closest to desire of fund founder which terminated.
In cases when fund’s assets are transferred to another fund with similar purpose, Ministry of Justice will in its decision on transfer of assets, determine the method which will keep the name of a fund founder from oblivion.
By termination of a fund, the rest of its assets become assets of a person who, by decision on termination of fund, was appointed to take the assets over.
Decision on termination of a fund with an excerpt from fund’s register about deletion of a fund can be a valid basis for enrollment of change of the owner into the land’s registers.
Competent body for representing a fund and initiate a lawsuit with Federation supreme court against the decision on termination of a fund.
8. Fund’s register
Article 40
A fund is enrolled in fund’s register.
Fund’s register is kept by Ministry of Justice.
The contents and method of keeping a fund’s register is specified by Federal ministry of justice.
A fund’s register and documents are kept permanently.
IV. TRANSFORMATION OF A FUND INTO FOUNDATION
Article 41
A fund will be transformed into a foundation when its incomes are not sufficient for permanent fulfillment of purpose of a fund, even in accordance with amended statute, but by using its basic assets possible fulfillment of its purpose for at least another ten years was anticipated, should a fund founder not specify some other solution.
Transformation of a fund into a foundation is carried out by amendment of fund’s statute which is published in BH Federation "Official Gazette".
Government will decide about transformation of a fund into a foundation at the proposal by relevant federal minister.
V. SUPERVISION
Article 42
Supervision upon operation of a fund is carried out by Ministry of Justice and Federal Ministry of Finance.
Ministry of Justice carries our supervision in order to ascertain whether basic fund’s assets are maintained, whether its purposes are fulfilled and whether the fund is managed in accordance with regulations.
Federal Ministry of Finance carries out supervision upon financial activities of a fund.
Article 43
Fund’s managing bodies are obliged to submit each year to ministries specified in article 42 of this law, a final account for the past calendar year. Final account must contain, inter alia, survey of income and expenditures for the past calculating period as well as status of fund’s assets.
VI. TRANSITIONAL AND FINAL PROVISIONS
Change of name, seat, assets, purposes and statuary provisions about fund’s managing bodies are carried out in a manner and by applying procedures as stipulated by this law for founding a fund.
Article 44
Federal minister of justice will pass regulations for which he is authorized by this law within 30 days of putting this law into effect.
Article 45
Foundations and funds which are founded before putting this law into effect, in accordance with regulations which were applied at the Federation territory, and decide to continue in accordance with this law, are obliged to align their general documents with provisions of this law within three months of putting this law into effect and are obliged to submit the aligned general documents and a document on founding a foundation or a fund to relevant ministry within the same period of time.
Relevant ministry will enroll a foundation or a fund from paragraph 1 of this article in a foundation register, namely a fund register in a manner stipulated in article 13, paragraph 4 and article 40, paragraph 3 of this law.
Article 47
This law will be put into effect the eighth day after publishing in BH Federation "Official Gazette"