The first step to analyze the current legal status of a non-profit organization in Honduras is to verify whether it is registered at the Monitoring and Registry Unit of Civil Associations (in Spanish, Unidad de Registro y Seguimiento de Asociaciones Civiles -URSAC) and the Property Institute.
If it is duly registered at URSAC and the Property Institute then the organization can provide the following documents:
1. Is in Good Standing with local tax authorities: Issued by DEI (Executive Income Office) regarding national taxes and by Municipal authorities regarding municipal tax.
2. Has granted sufficient authority to their representative bind the organization: Bylaws of the association must be duly approved and registered and set forth sufficient and ample powers to manage it and bind the organization.
3. Has no pending material litigation: A sworn statement of the Chair of the Board must attest it.
4. Bylaws include:
a. Evidence of a conservation purpose;
b. Evidence of not-for-profit status: and must be confirmed by means of a certificate issued by the Ministry of Finance;
c. Internal and external conflicts of interest policy;
d. Adequate provisions regarding asset transfer on liquidation or dissolution of the organization.
It is recommended to ask for a National Tax Registry (in Spanish, Registro Tributario Nacional -RTN); a Bank's reference letter and the financial Statements and balance sheet issued by a chartered accountant.
There are many civil associations in Honduras but not all of them are duly registered. A due diligence done by a local law firm with experiencie in the field is recommended to analyze the legal status of a non-profit association.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.