The third sector reform has involved various philanthropic bodies, foundations, cooperatives and associations that are part of the non-profit panorama, which also includes foundations of banking origin, regulated by the Civil Code. For this reason, foundations are considering the need to enroll in the so-called RUNTS, that is the Single National Third Sector Register, established by the new Third Sector Code. However, it is worth specifying first of all what foundations are: private entities that have legal personality and assets in order to achieve social or solidarity purposes. The discipline of foundations was introduced by the legislator in the Civil Code, Title II of Book I, where reference is also made to associations.
Third sector reform, enrollment in RUNTS – pros and cons – statute adjustment, tax regime of non-profit entities such as foundations
There are different types of foundations according to the event that underlies their constitution and the way they carry out the activity for the achievement of the objectives therein indicated. Following the reform of the Third Sector, foundations had to seriously consider the opportunity to migrate to RUNTS and work out whether the process is convenient or not. What is certain is that the RUNTS registration is not mandatory, but it is essential for the continuation of the non-profit activity. The legislator has in fact provided tax advantages for non-profit entities, foundations, associations and cooperatives that transfer to the Register of Third Sector Entities.
Adaptation of foundation statute and incorporation act for transmigration to RUNTS
Transmigration or registration to RUNTS, however, is not automatic but subject to verification. In order to transfer to RUNTS it is necessary to adapt the statute and the deed of incorporation of the foundation. It is important to refer to what is stated by art. 4 of decree 117 of 2017, which provides a definition of a third sector entity, including foundations. In fact, the following entities are part of the third sector category:
- philanthropic entities;
- voluntary organizations;
- social enterprises;
- social promotion associations;
- associative networks;
- social cooperatives;
- mutual aid societies;
- all other private entities excluding companies, which pursue social utility, solidarity or civic non-profit purposes through the main or exclusive performance of activities of general interest.
Some of the activities carried out by the charities are:
- free disbursement of money;
- voluntary activities;
- exchange of services or goods.
Since the establishment of the Third Sector Code, in order to continue their activity, all these entities must be registered or transferred to RUNTS, the Single National Register of the Third Sector.
Qualifying as a third sector body
To be more specific, the legislator has stated the possibility for foundations to re-enter the RUNTS in order to obtain the qualification of a third sector body. However, it is worth reiterating that this is not an obligatory choice and that there are situations in which foundations choose not to adapt to what established by the new third sector code. Indeed, in some cases access is even prohibited by law. According to the legislation recalled by third sector code, in fact, there are specific types of foundations that cannot request to be registered in RUNTS and therefore cannot obtain the qualification of third sector entities. This is the case, for example, of foundations of banking origin as per Decree 153 of 1999. These foundations are excluded due to what is stated in art. 3 of the aforementioned Decree 117 of 2017.
The main requirement for obtaining legal personality for foundations and associations
Through Decree 117 of 2017, the legislator provided for a significant simplification to the process of achievement of legal personality by foundations and non-profit associations. At art. 22, in fact, a minimum amount of assets has been identified that can be applied to the various entities wishing to acquire legal personality. Paragraph 4 indicates as minimum assets an available and liquid sum of at least 30,000 euros for foundations and at least 15,000 euros for associations.
Entities excluded from RUNTS that do no qualify as belonging to the third sector
In addition to foundations of banking origin, there are other associations and non-profit organizations that are excluded from the reform. In particular, the following entities cannot be considered as belonging to the third factor:
- associations representing economic and professional categories;
- trade unions;
- political associations;
- political formations;
- public administrations;
- employer associations and entities controlled, coordinated or directed by the above.
Consequently, a donation controlled, coordinated or directed by an entity identified by paragraph 2 of article 1 of Decree 165 of 30 March 2001 cannot request registration at RUNTS as it is not a third sector body.
For any clarification regarding the request for transmigration, registration at RUNTS, adjustment of the articles of association and deed of incorporation, identification of the best membership form for foundations and associations, philanthropic and benefits entities, please fill in the contact form. You will be called back as soon as possible by one of the resident lawyers at Damiani & Damiani.