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LAW ON ASSOCIATIONS, No. I-1231, 14 March 1996 (official translation)

Article 1. The Purpose of the Law

1. This Law shall regulate the procedure for the establishment, management, activities, reorganisation, and liquidation of associations.

2. This Law shall not apply to those associations the activities whereof are regulated by separate laws.

Article 2. The Concept of the Association

1. An association shall be a voluntary union of legal and natural persons which performs managerial, economic, social, cultural, educational, scientific research tasks and functions which are established by the association members.

2. The objectives of the activities, main functions and tasks of the association must relate to the activities or needs of the association members and must be laid down in its statutes.

3. Legal and natural persons may unite into associations by the type of activities, consumption, functions, and area. A person may be a member of several associations.

Article 3. The Status of the Association

1. The association shall be a legal person form the day of its registration, having the seal with its name and a settlement account. The association shall be liable for its obligations to the full extent of its property and shall both be liable for the commitments assumed by its members.

2. The association shall be a non-profit organisation. It cannot distribute a gained profit among its members. A non-profit organisation shall be an entity possessing the rights of a legal person which has been set up in accordance with the procedure established by the laws and the objective of activities whereof is not profit seeking.

3. The name of the association must contain the word “association”. The name of the association must conform to the requirements of the Regulations of Firm Names which are approved by the Government.

4. The association shall enjoy the freedom of activities, initiative and decisions, granted by the Constitution of the Republic of Lithuania, this and other laws of the Republic of Lithuania, decrees of the Government, and the determined duties, and in its activities shall abide by the association statutes registered in accordance with the procedure established by this and other laws.

Article 4. Association Members

1. Legal and natural persons of the Republic of Lithuania and other states may be association members. Restrictions on membership of foreign legal and natural persons in the association may be set in the statutes.

2. The members must observe the association statutes. The person who pursues interests contrary to the objectives of the association may not be admitted to the association.

3. The list of all the members must be held in the association, and the list of the members who belong to an affiliate must be held in that affiliate. Each association member shall have the right to familiarise himself with these lists.

4. The association member shall have the right to:

1) make use of the services rendered by the association;

2) acquire the information concerning the activities of the association;

3) use the information collected by the association; and

4) dispute in court the resolutions of the general meeting of the members and the collective managing body, and the decisions of the administration.

5. The members shall have the right to withdraw from the association and the association shall have the right to expel the members. The rights of the members, who have withdrawn or who have been expelled from the association, to the part of the association property shall be exercised according to the procedure established in the statutes.

6. If the member’s rights or lawful interests in the association are violated, the member shall have the right to defend them judicially.

Article 5. Establishment

1. An association may be established on the initiative of legal and natural persons. The association shall consist of at least 3 members.

2. The initiators of establishment of the association must convene a constituent assembly in which the persons (representatives authorised by them) who have expressed in writing their desire to be the members of the association which is being established shall have the right to vote. The constituent assembly shall adopt the decision concerning establishment of the association, its statutes and shall elect managing bodies.

Article 6. The Statutes

1. The statutes shall be a legal document which governs the activities of the association.

2. The following must be stated in the statutes:

1) the name of the association;

2) the registered office (address ) of the association;

3) the objectives functions and tasks of the association;

4) the rights and duties of the association members;

5) the procedure and conditions of admitting, withdrawal and expulsion of the members from the association;

6) the procedure for forming the managing bodies, their competence, functions and responsibility, the procedure for removing of the elective managing bodies and their members, the procedure for the payment for work of the members of the elective managing bodies;

7) the procedure for establishing and liquidating affiliates;

8) the sources of the property and funds;

9) control of financial activities;

10) the procedure for amending and supplementing the statutes;

11) duration of the activities of the association; and

12) the procedure for reorganising and liquidating the association.

3. The statutes may also contain other provisions which are in compliance with the law.

Article 7. Registration

Associations shall be registered, re-registered and removed from the register in accordance with the procedure established by the laws. Disputes concerning the registration of the association shall be settled in court.

Article 8. Affiliates

1. The association shall have the right to set up affiliates. They shall be set up in the procedure established in the statutes.

2. An affiliate shall be a subdivision of the association with a separate registered office. The affiliate is not a legal person and shall use the name of the association as a legal person. The affiliate shall operate in compliance with the association statutes and the powers granted by the general meeting of the members which must be specified in the statutes of the association and the regulations of the affiliate.

3. The affiliate shall be registered, re-registered and removed from the register in accordance with the procedure established by laws.

Article 9. The Union of Association

1. In order to solve their general tasks associations may unite into unions (confederations). The unions (confederations) of associations shall be established and operate in the manner prescribed by this Law.

2. An association shall join the union (confederation) at the resolution of the general meeting (conference, congress) of the members, which is adopted in accordance with the established procedure.

3. Enterprises, provided that they are not the members of the associations which are the members of the union, may be the members of that union (confederation).

Article 10. The Rights and Duties of the Association

1. In order to conduct the activities provided for in the statutes, the association may:

1) have a settlement account and a foreign currency account with the banks according to the established procedure;

2) possess and use the property and funds which belong to it, and dispose thereof;

3) conclude contracts and assume obligations;

4) set up enterprises and organisations. They shall be established and shall operate in accordance with the law on the enterprises or organisations of an appropriate type;

5) establish mass media facilities;

6) join the union (confederation) of associations and withdraw from it; and

7) join international organisations.

2. The association shall be prohibited from engaging in commercial activities.

3. The association shall conduct accounting, present financial accounting data to state institutions and pay taxes in accordance with the procedure established by the laws.

Article 11. The Property and the Sources of Income

1. The association may by the right of ownership own buildings, means of transportation, equipment and other kinds of property necessary for carrying out of the activities provided for in its statutes which may be acquired with the funds from the sources established in Paragraph 2 of this Article.

2. Income sources of the association shall be as follows:

1) initial contributions of the members, membership fees and special-purpose contributions;

2) special-purpose funds of the State and local authorities;

3) funds and property donated by legal and natural persons;

4) legacies left to the association;

5) profit of the enterprises established by the association; and

6) interest paid by credit institutions on the funds kept in them.

3. The receipts of the association from the activities which are not provided by the statutes, as well as the receipts generated or applied in violation of this Law, shall be transferred to the State Budget in the manner prescribed by laws.

Article 12. Managing Bodies

The managing bodies of the association shall comprise the general meeting (conference, congress) of the members, collective managing body (bodies) and the administration.

Article 13. The General Meeting of the Members

1. The general meeting (conference, congress) of the members shall be the supreme managing body of the association.

2. The meeting (conference, congress) shall have the power to:

1) adopt, amend and supplement the statutes;

2) set objectives and main tasks of the association;

3) establish the procedure for the formation of the collective managing bodies, elect their members and remove them from office;

4) fix the amount of contributions and taxes of the association members and the procedure of payment thereof; and

5) establish enterprises, mass media facilities belonging to the association, reorganise or liquidate the association.

3. The meeting (conference, congress) must be convened at the time established in the statutes. An extraordinary meeting must be convened provided that it is requested by no less than 1/5 of the association members, by the resolution adopted by the collective managing body, or by the examiner (examination commission, auditor).

4. The meeting (conference, congress) shall be considered valid if no less than half of its potential participants attend it. Decisions shall be adopted by a simple majority vote. Votes of no less than 2/3 of the representatives present at the meeting shall be necessary in order to adopt resolutions on the issues specified in items 1 and 5 of Paragraph 2 of this Article. While voting each participant of the meeting (conference, congress), regardless of the amount of the contributions made by the respective participant or the association member whom he represents, and the number of the members represented, shall have one deciding vote.

5. If the meeting does not have a quorum, a repeat meeting must be called within one month according to the procedure established in the statutes which shall have the right to adopt resolutions on the items set in the agenda of the meeting which has not taken place, irrespective of the number of the number of the members present.

6. Instead of a general meeting of the members, a conference or congress may be convened in accordance with the procedure established in the statutes.

Article 14. The Collective Managing Body

1. During the period between general meetings of the members a collective managing body (bodies) shall guide the activities of the association, which is elected in accordance with the procedure established in the statutes and for the set period of time.

2. The collective managing bodies may be: the Board, the Council, the Presidium. The association statutes shall establish which managing bodies are set up, the number of their members, functions and powers of the managing bodies.

3. Natural persons – association members or representatives of the collective members may be the members of the collective managing body. The statutes may contain additional requirements for a member of the collective managing body.

4. The meeting of the collective managing body shall be valid if it is attended by at least 1/2 of the members of the managing body, and the adopted decisions shall be considered lawful when no less than half of the members of the managing body vote for them. The members shall have equal voting rights. In case of a tie, the head’s of the collective managing body vote shall be casting.

Article 15. The Administration

1. The operative activities of an association shall be organised and carried out by the administration.

2. The association must have the head of the administration and chief financier (book-keeper). One and the same person cannot hold both posts concurrently.

3. The head of the administration and chief financier shall be appointed and their official salaries shall be fixed by the collective managing body which concludes employment contracts with them.

4. The head of the administration shall:

1) direct the administration;

2) according to the granted powers enter into transactions on behalf of the association and represent the association in other institutions; and

3) take on a job and dismiss employees of the administration as well as fix their official salaries.

Article 16. Control of Financial Activities

1. The association must from time to time perform inspections of financial activities. The inspections must be performed by the examiner (examination commission, auditor) who is elected by the general meeting (conference, congress) of the members for the term established by the statutes. A natural person who has a qualification certificate or a legal person which has the right to provide audit services may be an examiner or auditor. A member of the collective managing body of the association, and an employee of the administration cannot be an examiner.

2. The examiner shall control the financial activities of the association. He must:

1) inspect annual accounts of the association and other financial accounting documents;

2) at the instructions of the general meeting of the members or the Board perform the financial accounting inspections of the association;

3) notify the next schedule general meeting of the members or the sitting of the collective Managing body of the violations disclosed during the inspection; and

4) Present to the general meeting of the members an annual report on the inspection of financial activities of the association.

3. The administration and the collective managing body of the association must furnish to the examiner the financial accounting documents requested by him.

4. The examiner shall be liable under the laws for concealing deficiencies of the activities of the association.

5. The State Control shall have the right to inspect how the funds allocated by the State and local authorities are being used.

Article 17. Reorganisation

1. The association may be reorganised by the resolution of the general meeting (conference, congress) of the members. The association may be reorganised in the following ways:

1) by uniting with other associations; and

2) by dividing the association into several associations.

2. When reorganising the association, its property must be evaluated; the examiner or auditor must present in writing the conclusions concerning the property prior to the general meeting of the members at which the reorganisation of the associations shall be considered.

3. The associations that are in operation after the reorganisation shall take over the rights and liabilities of the reorganised association. The procedure and time limits of taking over the rights and liabilities shall be set by the general meeting of the members.

4. The reorganised associations shall be registered in the manner prescribed by laws.

Article 18. Liquidation

1. The association may be liquidated on the following grounds:

1) the time of the duration of the association as specified in the statutes has expired;

2) the resolution of the general meeting of the members;

3) the fact that there are less association members left than established by this Law; and

4) the court’s decision to liquidate the association for the violations of law established by the laws.

2. The managing body or institution that has resolved (decided) to liquidate the association, shall appoint a liquidator, establish his powers, time limits of liquidation, procedure for stock-taking and taking over the property. The procedure for appointing the liquidator and granting him the powers in the case specified in item 3 of Paragraph 1 of this Article must be established in the statutes. After the liquidator is appointed, the association shall acquire the status of the association in liquidation: the managing bodies shall be divested of the powers to manage the association, and their functions shall be performed by the liquidator.

3. The liquidation or reorganisation must be announced publicly on two separate occasions in the manner prescribed by the statutes; the interval between the two occasions must be at least 30 days.

4. Upon liquidation of the association, the liquidator must draw up the act of liquidation, remove the association from the register, and return the certificate to the registrar who issued it. 5.

When liquidating the association its property and funds which are left after paying debts shall be used in accordance with the procedure established in the statutes. Only initial contributions may be returned to its members.

Article 19. Final Provisions

The associations registered up till now must revise their statutes according to this Law and register them within one year from the promulgation of this Law.