We would like to offer you a selection of key legislative changes related to the activities of civil society organizations. In the October issue, the Ukrainian Center for Independent Political Research has collected the main topics worth knowing about:
- Draft Law on Regulation of Social Entrepreneurship Has Been Registered
- Draft Law on Updating Book One of the Civil Code Has Been Adopted in First Reading
Read more about these changes and find out how they will affect the work of CSOs
Regulatory Acts Adopted
A draft law on updating Book I of the Civil Code has been adopted
What the document is about: The draft law No. 14056, in the part related to CSOs, proposes to revise the approach to defining the rights of the child. Thus, the list of rights of a minor child (note: a minor is a child under the age of fourteen) has been expanded - the right to participate in children's public organizations has been added to the list of rights that such a child can exercise independently; for underage children (note: a child aged fourteen to eighteen), the list of opportunities to participate in public organizations is proposed as follows - they have both the right to participate in public organizations and the right to be a founder of CSOs.
Regarding the regulation of legal entities, the draft law specifies approaches to the classification of legal entities, stating that legal entities of private law can be established only in the form of companies or institutions. The concept of constituent documents and the definition of the internal structure of a legal entity have been clarified, and approaches to legal entities under private and public law have been unified.
Why this is important: The right of a child to participate in children's public organizations is currently enshrined in separate legislative acts, in particular in the Laws “On the Basic Principles of Youth Policy” and “On Public Associations”; enshrining this right in the Civil Code will help ensure its systemic recognition and strengthen guarantees for the exercise of this right, as well as encourage children to join civil society and civic activism.
At the same time, the draft law contains several provisions related to the functioning of legal entities that require further discussion with civil society and experts. The draft law does not take into account the specific needs of civic organizations, whose activities are primarily related to grant funding. Thus, to enter into transactions whose subject matter exceeds ten percent of the organization's net assets, a general meeting must be convened, and at least three-quarters of the votes must be cast. Convening a general meeting to conclude significant transactions can create excessive bureaucratic obstacles and complicate prompt decision-making for donor-funded projects with limited timeframes.
The Cabinet of Ministers has approved a new procedure for providing budget grants to support youth projects.
What the document is about: The document introduces unified rules for the competitive provision of budget grants from the state budget for implementing youth projects related to the objectives of state programs in the field of youth policy. Main innovations:
The number of grantees has increased; in addition to youth and children's NGOs, individuals (including youth, members of councils, self-government, youth workers, and advisors), individual entrepreneurs, and legal entities working with youth will be eligible to apply.
At least 15% of the project budget must be co-financed.
A new selection mechanism is being established - three levels of evaluation with technical and expert analysis of applications.
Organizations that violate the following rules are not allowed to participate in the competition: dual funding, NSDC sanctions, tax debts, disputes with the UMF, activities in the Russian Federation/RB or TOT, criminal record, etc.
Funds are transferred from the UMF to a separate account of the grantee, used within a year, and any remaining balances are returned by December 20. In the event of violations, the funds are returned.
It is forbidden to spend grant funds on: preparation of the application, intermediary services, staff maintenance, and expenses financed from other sources.
UMF monitors, analyzes reports, and provides recommendations; the results are taken into account in future competitions.
Why it is important: This approach introduces an integrated system of state project support for youth policy through the UMF in the format of budget grants. The document regulates the entire cycle, from annual prioritization and competitions to selection, monitoring, and reporting processes. UCIPR experts have made a detailed overview of the main changes in state funding of competitions for youth CSOs, which can be found here.
Registered legal acts
A draft law on social entrepreneurship has been registered
What the document is about: The draft law introduces the concept of social entrepreneurship as small and medium-sized enterprises engaged in entrepreneurial activities, the main purpose of which is to achieve specific socially beneficial tangible or intangible results aimed at solving social problems and/or meeting the social needs of particular categories of individuals or groups of the population, and for profit.
It is proposed to extend state support for social entrepreneurship to all types of support provided for small and medium-sized enterprises. This includes financial, informational, and consulting support. The development and support of social entrepreneurship through involvement in government programs aimed at addressing employment, social integration, community development, and territorial development are key areas of state policy in the field of small and medium-sized enterprise development.
The draft law also expands the legal definition of a “philanthropist,” so that it can also be an individual entrepreneur who voluntarily carries out one or more types of charitable activities.
Why it is important: Legal regulation of social entrepreneurship has been a relevant and necessary topic for Ukrainian society and the public for many years. Attempts to establish legislative rules for such entrepreneurship have been made before, but have not been successful. This draft law proposes to establish not the definition of “social entrepreneurship” but the entities that carry it out, with the characteristics of such activities. At the same time, the document does not take into account the specifics of the activities of individual entrepreneurs, their taxation system, and the regulation of charitable assistance in accordance with the current legislation and the position of the State Tax Service. The right of charitable organizations to act as social entrepreneurs needs to be clarified and harmonized with current legislation.
The legal regulation of social entrepreneurship necessitates a comprehensive approach, as well as further consultation with the expert community and the public. The UCIPR team will continue to monitor changes in the field of social entrepreneurship and inform the public sector.
The digest is produced by NGO “Ukrainian Center for Independent Political Research” with the support of the Askold and Dir Fund as a part of the the Strong Civil Society of Ukraine - a Driver towards Reforms and Democracy project, implemented by ISAR Ednannia, funded by Norway and Sweden. The contents of this publication are the sole responsibility of UCIPR and can in no way be taken to reflect the views the Government of Norway, the Government of Sweden and ISAR Ednannia.
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