Law on the Transformation of Civic Associations

While the Associations Act, by which many organisations are governed, requires that they provide services only to their members, in practice they operate hospices, day-care centres for people with disabilities, or care for wheelchair users and provide their social and healthcare services to a wide range of clients. Under the existing legislation, however, they had no option to change their statutes or legal form and were practically forced to circumvent the law, since clients of these organisations logically cannot be considered members of a civic association. If they can transform into public benefit corporations, they will gain, among other things, new possibilities to secure financial resources for their operations from sources other than the state. Many donors prefer cooperation with public benefit organisations, whose functioning is more strictly regulated and can be considered more transparent than that of civic associations.

The bill on the change of legal form from civic association to public benefit corporation was submitted to the Chamber of Deputies by coalition members of parliament, led by Lenka Kohoutová, a member of the Committee for Social Policy, in cooperation with representatives of the non-profit sector. The law is intended to allow civic associations that express such interest through the votes of all their members to change their legal form to a public benefit corporation. If the upper chamber and the president also give their consent, it will come into effect at the beginning of 2013.