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DRAFT TRANSLATION FOR INFORMATION ONLY. NOT A FINAL OR AUTHORIZED TRANSLATION.

THE LAW OF THE REPUBLIC OF ARMENIA
ON FOUNDATIONS

Chapter 1. General Provisions

Article 1. Sphere of Application of the Law

1. This law, in accordance with the Civil Code of the Repub lic of Armenia (RA), defines
the legal condition of foundations , regulates the legal relations, which arise in the process
of establishment, activity implementation, reorganization and liquidation of foundations.
2. Application of the given law extends to foundations, which ha ve been established and are
being established in the Republic of Armenia.
3. Peculiarities and legal condition of other type s of foundations are stipulated by different
laws.

Article 2. Legislation on Foundations

Legislation on foundations consists of the RA Constitution, the RA Civil Code, this law,
other laws and legal acts, as well as internati onal treaties signed by the Republic of Armenia.

Article 3. Legal Status of Foundations

1. Foundation is a non-commercial organization, which is established based on voluntary
contributions of property on behalf of citi zens and (or) legal persons, and which does not
have members and pursues social, charitable, cultural, educational, scientific, public
health, environmental or other public benefit goals.
2. The foundation is considered created from the moment of its state registration in
accordance with the manner stipulated by the law.
3. The foundation is a legal person and has propert y separated from that of the founder, and
expressed in its own balance.
4. The foundation, in its own name, may acqui re and exercise property and personal
nonproperty rights, bear duties, and be a plaintiff and a defendant in the court.
5. The foundation has the right to open bank accounts in the Republic of Armenia and in the
banks of foreign countries in Armenian Drams or foreign currency in the manner
stipulated by the law.

Article 4. Beneficiaries of Foundations

1. The foundations may have potenti al and actual beneficiaries.
2. The potential beneficiaries of foundations are those natural and legal persons, for whose
benefit certain payments may be made, services may be provided or some part of the

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foundation’s property may be transferred in accordance with the charter of the
foundation.
3. The actual beneficiaries of foundations are those natural and legal persons, for whose
benefit certain payments have been made, cer tain services have been provided or some
part of the foundation’s property has been transferred.
4. The founders of a foundation may only use the services provided by the foundation.

Article 5. Name and Symbol of Foundation

1. The foundation has a name, which must contai n the word “foundation”, as well as an
indication regarding the field of its activities, in case if this inform ation is not obvious
from the name.
2. The name of the foundation must differ from that of other foundations, including those
that have been liquidated within one year preceding the registration of the foundation.
3. The foundation may use in its name the name of a famous natural person, only by the
consent of the latter, and in case if he/she is dead, only when the written agreement of all
heirs, who have received his/her inheritance, is present. In case if there are not any heirs
who have received inheritance, the name of th e famous person may be used in the name
of the foundation, if that person has won fame in a field that corresponds with the main
field of activity of the foundation.
4. The foundation must have a round seal containi ng its name. The seal may also contain the
name of the foundation in other languages, and its symbol.
5. The foundation may have a symbol. The image and the description of the symbol are
included in the charter of the foundation.
6. The symbol of the foundation must not coinci de with state symbols of the Republic of
Armenia. It is prohibited to use the RA State Emblem as symbol of foundation, with the
exception of those cases when the founder or one of the founders is the
Republic of
Armenia. In this case, the RA Government gives permission to use the RA State Emblem.
7. The foundation may have stamps and letterhead s containing its name, as well as other
means of individualization.

Article 6. Separated Subdivisions and Institutions of Foundations.

1. The foundation has the right to create separated subdivisions (branches and
representations) and institutions in accordance with the law and other legal acts.
The creation of separated subdivisions and inst itutions in foreign countries is carried out
in accordance with the laws and other le gal acts of those countries, unless the
international treaties signed by the RA stipulate otherwise.
2. The name of the separated subdivision or th e institution of the foundation must include
the name of the foundation that has created it.
3. The separated subdivisions and institutions of the foundation are considered created from
the moment of adoption of the corresponding decision.
4. The separated subdivisions and institutions of the foundation are registered according to
the manner stipulated by the law and other legal acts.

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Article 7. Location of Foundation

1. The location of the standing body of the f oundation (the executive body [or one of the
bodies] stipulated by the charte r) is considered as the location of the foundation.
2. The foundation may have a postal (e-mail) address, by means of which communication
shall be maintained with the foundation. Th e delivery of mail and other correspondence
to the postal (e-mail) address or to the pl ace of location of the foundation is considered
appropriate delivery.

Article 8. Property of Foundation

1. The foundation has separated propert y at its ownership and is responsible for its liabilities
by this property.
2. Initial funds of the foundation are those material and (or) financial funds tran sferred to it
at the moment of creation by the founder.
3. Property transferred to the foundation by the founder shall be in the possession of the
foundation. The foundation shall use this property according to the goals stipulated by its
charter.
4. Following are the sources that may be used for the formation of the foundation’s funds:
1) The founder’s contribution;
2) Donations and contributions from natural and legal persons, here including also
donations and contributions from fore ign natural and legal persons, and
international organizations;
3) Monetary allocations from the state budget;
4) Grants;
5) Funds received from entrepreneurial activ ities carried out by the foundation, or
commercial organizations that where cr eated by the foundation or to which the
foundation participates;
6) Fund raising – funds received from activities aimed at raising money (fund raising
through cultural, sport, amusing and other events);
7) Other ways unrestricted by the law.
5. Funds from the state budget ma y be allocated to support the activities of the foundation,
only on competitive bases and only when the program of activities of the foundation has
been officially certified as publ ic benefit or charitable. Funds from the state budget may
not be used to cover administrative-ma nagerial expenses of the foundation.
6. The foundation property may not be used for th e benefit of its founders, the members of
the executive bodies, nor th e staff of the foundation, with exception of expenses related to
the payment of wages to the foundation empl oyees and to compensation of expenses
related to the fulfillment of duties of a member of the foundation bodies. The
contributions donated to the foundation by legal or natural persons for the
accomplishment of certain goals, may be used for other goals, only by the consent of the
contributor. Funds received through fund raising may be spent only for the
accomplishment of goals that have been announced in advance.
7. The expenditures of the foundation are:
1) Expenditures spent for the accomplishment of statutory goals;
2) Administrative-managerial costs;

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8. The expenditures envisaged by paragraph 7, point (1) of this Article shall be marked in
the budget of the foundation separately according to the goals and methods of application
and (or) according to the subjects, among w hom the funds will be distributed. These
expenditures also include expenses for pres ervation, growth and repair of the foundation
property, as well as communicational, communal-general, electricit y and constructional
expenses.
9. The expenditures envisaged by paragraph 7, point (2) of this Article include expenses for
management of the foundation, and expenses for the payment of wages to the foundation
employees and for compensating the work of the members of the foundation bodies.
10. The charter of the foundation stipulates the sum of money set for expenses envisaged by
paragraph 7, point (2) of this Article. This sum should not exceed 20% of general annual
expenses of the foundation.

Chapter 2. Creation of Foundation

Article 9. Creation of Foundation

A foundation may be created as a result of its establishment by the founders or
reorganization of an existing foundation according to the manner stipulated by this law, and also
as a result of reorganization of non-commercial organizations according to the manner stipulated
by the law.

Article 10. Establishment of Foundation

1. Creation of a foundation through establishmen t is carried out by the decision of the
founding assembly.
2. The foundation may be created by one person. In case if the foundation is being
established by one person the decision, regardi ng the establishment is made (in written
form) by that person solely.
3. The founders of a foundation shall sign a writt en agreement regarding the creation of the
foundation, which shall include:
1) Information about founders:
– For natural persons: name, passport information, place of residence,
phone number and other means of communication;
– For legal persons: full name of th e firm, data on state registration,
location (postal address), name of th e director or the representative of
the legal person, phone number and other means of communication.
2) Manner of joint actions of founders in connection with the creation of the
foundation;
3) Goals of the foundation;
4) Possible categories of potential beneficiaries;
5) Terms of the foundation’s activities;
6) The rights and obligations of the founders in connection with the creation of the
foundation;
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7) Data regarding formation of initial pr operty of the foundation and manner of
transferring th is property.
8) Distribution of responsibilities between founde rs for liabilities that have come up
as a result of actions of the founders in the process of creating the foundation, in
case if the foundation is c onsidered failed or if the founding assembly does not
approve the activitie s of the founders.
4. The establishment of a foundation by or with the participation of the Republic of
Armenia or its Communities is carried out correspondingly by the decision of the
Government or the Comm unity Council (Avagani).

Article 11. Establishment of Foundation by Will

1. Foundation may be established by will.
If the foundation is being esta blished by will, the decision re garding the establishment is
made by the executor of the will (hereof ex ecutor) based on the Certificate on the Right
of Succession. In this ca se, in addition to the information envisaged by Article 13 of this
law, the decision must also contain the executor’s and the testator’s first and last names,
the executor’s passport information, place of residence, phone number and other means
of communication.
2. In the Certificate on the Right of Successi on issued by notary to the executor, the
obligation of registering the foundation within a month on behalf of the testator shall be
declared, unless the will stip ulates a different time-period. If the executor avoids the
execution of obligations arising from the will, then the court shall appoint a different
executor upon the demand of interested persons.
3. If the will does not mention an executo r than the court shall appoint one.

Article 12. Founders of Foundation

1. With exceptions of those people whose part icipation in foundations is prohibited or
limited by the law, all citizens of the Republic of Armenia, foreign citizens, persons
without citizenship, Armenian and foreign legal persons may become founders of a
foundation.
2. In cases envisaged by Article 11 of this la w, the testator becomes the founder of the
foundation.
3. The Republic of Armenia and its Communitie s may become founders of foundations on
equal bases as citizen s and legal persons.
4. State or local self-govern ance bodies may not become founders of foundations.
5. The founders (founder) do not bear responsibilities for the liabilities of the foundation,
and the foundation does not bear responsibilities for the liabilities of its founders
(founder).
6. The founders of a foundation bear equal resp onsibility for liabilities that came up in
connection with the creation of the f oundation before its state registration.
The foundation shall bear responsibility for the founders’ liabilities created in connection
with the creation of the founda tion, only in cases when the activities of the founders
directed at the creation of th e foundation receive the approv al of the founding assembly.

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Article 13. Founding Assembly of a Foundation

1. The founding assembly of a foundation (hereo f founding assembly) shall gather no later
than within 3 months af ter signing the agreemen t on creating the foundation.
2. The founding assembly is considered auth orized, if all the founders or their
representatives take part in it.
3. The founding assembly:
1) Makes decisions regarding the establishment of foundation;
2) Verifies the charte r of the foundation;
3) Forms the foundation’s board of trustees;
4) Appoints the manager of the f oundation (executive director);
5) Hears the report of the founders and (or) the person authorized by them regarding
the expenses made before the establishment of the foundations.
Decisions defined by points (1) and (2) of this paragraph are made by unanimous
agreement of the participants of the founding assembly.
For all other questions, decisions are made by simple majority of votes of the
participants of the assembly, unless the char ter provides for a greater number of votes.
4. The Government decision on establishment of foundations with the participation of the
Republic of Armenia must include provisi ons regarding the establishment of the
foundation, as well as the state governing body (bodies) that will act on behalf of the
founder. Other authorities envisaged by paragra ph 3 of this law may be reserved by the
Government to the corresponding state governing body (bodies).
5. The decision on establishment of foundations with the participation of the Community
must include provisions regarding the establ ishment of the foundation, as well as the
authorized persons who will act on behalf of the founder. Other authorities envisaged by
paragraph 3 of this law may be reserved by the Community Council to the authorized
person.
6. In case of establishment of foundation by one person, the written decision of the founder
must contain provisions regarding issues envisaged by paragraph 3, points (1) through
(4), of this Article.

Article 14. Failed Foundations

The foundation is considered to have failed:
1) If the founding assembly has not gathered within the time period stipulated by
paragraph 1 of Article 13, of this law;
2) If the foundation has not applied for state re gistration in the stipulated manner within
2 months after the decision regarding the establishment of the foundation has been
made;
3) In case if the foundation has been rejected state registration, and the foundation has
not appealed this rejection in the court within 3 months, or if the appeal has also been
rejected and the decision has entered into legal force.

Article 15. Charter of the Foundation

1. The founding document of a foundation is the foundation’s charter (hereof charter).

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2. The charter defines:
1) The name of the foundation;
2) The location of the foundation;
3) The goals of the foundation;
4) List of the types of entr epreneurial activities that the foundation may engage in;
5) Information about the founder (founders);
– For natural persons: first name, last name, passport information, place of
residence;
– For legal persons: full name of th e firm, data on state registration,
location (postal address), name of th e director or the representative of
the legal person.
6) The value of initial propert y of foundation, the manner of management and
governance of the found ation’s property;
7) Categories of possible beneficiaries of the foundation;
8) Terms of foundation’s activity;
9) Manner of formation of the foundation bodies, number of their staff and authorities,
their decision making procedures, including decisions on those issues, that require
unanimous agreement or qualitative majority of votes;
10) Procedure for liquidating the foundation and the manner of usage of property in this
case;
11) Other provisions envisaged by this la w, and not contradicting the law.
3. If the provisions of the charter contradict th e RA legislation, than the provisions of the
legislation shall be applied.
4. The bodies of the foundation may introduce cha nges into the charter of the foundation, if
the charter envisages the possibility of such changes.
If the preservation of the ch arter without changes may bri ng to results, that could not
have been predicted at the time when the foundation was being created, and the charter
does not envisage the possibility of changing it, or if the body that has the authority to
change the charter does not do this, then the court, based on the appeal from the
foundation’s bodies, implements the right of making those changes.

Article 16. State Regist ration of Foundations

1. Foundations are subject to state registrati on according to the manner stipulated by the
law.
2. The foundation for state registration, no later than within 2 months after the day the
decision on establishing the foundation has been made, must present to the state
registration body the following documents:
1) Application for state registration signed by the founders or the person authorized
by them;
2) At least two copies of the foundation’s charter;
3) Decision on establishing the foundation;
4) Written agreement on creating the foundation;
5) Receipt of payment of the state duty.
If the name of the foundation contains the name of a famous natural person, than the
agreement envisaged by Article 5, paragra ph 3 of this law shall be presented.

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3. Additions and changes to the charter, as well as newly adopted editions of the charter are
subject to state registration according to the manner stipulated by the RA Law on
Registering Legal Pers ons and this law.

Article 17. Terms of State Regist ration and Bases for Rejection

1. After submitting all the necessary documents to the state registration body and after
making on that same day a r ecord in the register of incoming documents, the state
registration body of legal persons must regist er them no later than within 15 days.
2. The state registration of the foundation is rejected in the following cases:
1) If the manner stipulated by this law for formation of a foundation has been
violated;
2) If the charter of the founda tion contradicts the law;
3) If the name of the foundation coincides with the name of some other foundation
registered in the past;
4) If not all the documents necessary for st ate registration, envisaged by this law,
have been presented.
3. The rejection to register the foundation, as well as avoidance of registration may be
appealed in the court.
4. It is not allowed to reject registration of a foundation base d on inexpediency of creating
it.
5. The rejection of state registration does not serve as an obstacle for submitting a new
application for registration.

Chapter 3. Rights and Obligations of Foundation. Responsibility

Article 18. Rights of Foundation

1. The foundation according to its statutory purposes has the rights:
1) To provide material assistance to natura l and legal persons according to the manner
stipulated by this law;
2) To disseminate information about its activities without restraint;
3) To establish press and other mass media means;
4) To receive information, necessary for the accomplishment of its statutory purposes,
from state and local self-governance bodies, according to the manner stipulated by the
law;
5) To create separated subdivisions (branc hes, representations) and institutions;
6) To create commercial organizations or to participate in them;
7) To sign agreements with natural and legal persons;
8) To carry out scientific res earches and develop projects;
9) To assist in the implementation of cultura l, educational and scientific initiatives
suggested by natural and legal persons;
10) To implement other activities not forbidden by the law.
2. The foundation according to the legislation of the Republic of Armenia and its charter
may become member of international a nd foreign non-governmental organizations.

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Article 19. Entrepreneurial Activity of Foundation

1. The foundation may carry out entrepreneurial activities only in those cases, when it
serves for the accomplishment of goals for which it has been created and corresponds to
these goals. The foundation may carry out en trepreneurial activities directly, or it may
create commercial organizati ons or participate in them.
2. The foundation has the right to carry out only in those types of entrepreneurial activities
that are envisaged in its charter, in cases when it carries out those activities directly
according to the manner stipulated by this law.

Article 20. Obligations and Re sponsibility of Foundation

1. The foundation is obliged:
1) To act in accordance with the RA Constitu tion, this law and other laws and legal
acts, as well as its charter;
2) To keep records and accounting in the manner stipulated by the law;
3) To present information and reports to st ate bodies in cases and in the manner
stipulated by the law;
4) To fulfill other obligations envisaged by this and other laws.
2. Upon demand of persons envisaged by points (1 ) through (4) of paragraph 4 of Article 8
of this law, as well as upon demand of au thorized state bodies, the foundation within 5
days must grant that person an opportunity to get acquainted with its charter, and
additions and changes to the charter. The foundation must provide a copy of its charter
upon demand of that person. The fee collected for providing a copy of the charter, shall
not exceed the expenses incurred for prepar ing it. The mentioned documents shall be
provided to the authorized state bodies free of charge.
3. The foundation and its officials bear responsib ility envisaged by the law, for carrying out
illegal activities.

Chapter 4. Bodies of Foundation

Article 21. Bodies of Foundation

1. Foundation carries out its activit ies through its bodies. The bodies of the foundation are:
1) Board of trustees of the foundation;
2) Manager or executive director of the foundation (hereof manager).
2. The charter of the foundation may envisage other bodies as well (including corporate
executive bodies), whose authorities sh all be stipulated by the charter.

Article 22. Board of Trustees of Foundation

1. Board of trustees is the supreme manageme nt, as well as the supervising body of the
foundation.
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2. Able natural persons who have turned 18 may become members of the foundation board
of trustees.
3. The founder shall assign the first membership of the foundation’s board of trustees;
meanwhile the executor shall do this in case of establishment by will, unless the will
stipulates otherwise.
The number of members of the board of trus tees is envisaged by the charter of the
foundation and should not be less than 3.
4. Members of the board of tr ustees cannot serve as memb ers of other bodies of the
foundation.
5. The president or the co-presidents of the founda tion’s board of trustees are elected by and
from the members of the board with simple majority of their votes, unless the charter
envisages a greater number of votes.
6. The members of the board of trustees of the foundation shall fulfill their duties on social
bases without any compensation. Compensati on may be envisaged for the members of
the board of trustees for those expenses that are connected with the fulfillment of their
duties as members of the board of trustees. The board of trustees shall stipulate the
manner of compensation payments.
7. Honorable Members of the board of trustees may participate in the works of the board o
f
trustees with the right for an advisory vote. The title of an Honorable Member of the
board of trustees is granted by the board of trustees in cas es and in the manner envisaged
by the charter.

Article 23. Terms of Authority of the Members of the Board of Trustees, Manner of Their
Election

1. The terms of authority of the members of the board of trustees are not limited, unless the
charter stipulates otherwise.
2. The authority of a member of the board of trustees shall cease in the following cases:
1) Upon his/her written request;
2) In case of the ¾ majority of the other members of the board when the member
does not fulfill his/her responsibilities properly;
3) In case when the term of his/her authorit y has expired, if the charter stipulates
such a term;
The authorities of members (appointed by the Republic of Armenia or its
Community) of a board of trustees of a founda tion created with the participation of the
Republic of Armenia or its Community, may cease at any given moment according
correspondingly to the decision of the RA Government or a member of the Community.
The authority of a member of the board of tr ustees shall be considered ceased in case
of his/her death.
In cases envisaged by point (1) of the first part of this paragraph, the authorities of the
members of the board of trustees shall be considered ceased following the day of
submission of the request. In cases envisage d by point (3) of the first part of this
paragraph the authorities of the members of the board of trustees shall be considered
ceased following the day of electing new me mbership of the board of trustees.
3. In cases envisaged by paragraph 2 of this ar ticle the candidacy for the election of a new
member is suggested by the founders, however if the founders do not exist, or if they do

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not make a suggestion of a candidate within 30 days following the appearance of the free
spot in the membership of the board of trustees, then any member of the board of trustees
can make this suggestion.
The founders must be properly notified abou t the appearance of a free spot in the
membership of the board of trus tees, no later than within 10 days after the spot appeared.
4. The new member of the board of trustees is el ected by two-thirds majority of the votes of
the members of the board, no later than w ithin 60 days after the authorities of the
previous member have ceased.
If none of the candidates gathers enough votes for being elected, than a second voting
takes place between the two candidates having gathered th e maximum number of votes.
The candidate who gathers the maximum number of votes, that however should not be
less than half of the votes of all the members of the board of trustees, shall be considered
elected.
If none of the candidates is el ected in the manner stipulated by this paragraph, then the
elections of the member of the board of trustees are considered to have failed.
5. In case if the elections are considered to ha ve failed, according to the manner stipulated
by paragraph 4 of this article, the candid acy for the election of a new member is
suggested by the founders, within 2 months afte r the election has been considered to have
failed. However if the founders do not exist, or if they do not make a suggestion of a
candidate within 45 days following the appear ance of a free spot in the membership of
the board of trustees, then any member of the board of trustees can make this suggestion.
In this case the elections ar e held within 6 months after the time period for suggesting
candidates has finished, in the manner stip ulated by paragraph 4 of this article.
6. If the number of members of the board of tr ustees becomes less than the minimal number
envisaged by paragraph 3 of Article 22 of th is law and the membership of the board of
trustees does not get completed within one year, than the foundation is subject to
liquidation in the manner envisaged by this law.
7. In case of suspension of authorities of all members of the board of trustees on bases
envisaged by this article, the founder of the foundation, within 3 months or in the manner
stipulated by this article, shall complete the membership of the board of trustees or shall
appeal to the court for liquidating the founda tion. Otherwise the RA Minister of Justice
shall appoint a board of trustees consisti ng from 3 members for a period of 3 months
(hereof provisional board), which shall form a new board of trustees within 6 months
after its appointment, according to the manner stipulated by law. In case of inability to
form a new board of trustees within the stated period, the provisional board shall appeal
to the court for liquidating the foundation.

Article 24. Decisions of the Board of Trustees

1. The board of trustees fulfills its activities through sessions. The session of the board of
trustees is considered authorized if more than half of its members participate in it, unless
the charter envisages a greater number of pa rticipants. The decisions of the board of
trustees are made by simple majority of vot es of the members present at the session,
unless this law and the charter of the founda tion envisage a greater number of votes.
2. Decisions regarding the election and dismissal of the presid ent of the board of trustees or
the manager of the foundation, as well as decisions regarding reorganization or

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liquidation of the foundation, or changes and additions to be made in the charter
(adoption of new editions of th e charter) are made by majority of votes of all members of
the board of trustees.
3. If during the session of the board of trustees , some issue shall be discussed concerning
property or other interests of one of the me mbers of the foundation’s board or any person
related to him/her (parent, spouse, child, brot her, sister, the spouse’s parent, child brother
or sister), than this member of the board of trustees shall not participate in the voting.

Article 25. Competence of the Board of Trustees

1. Following issues fall within the competence of the board of trustees:
1) Development of strate gy of the foundation;
2) Approval of the foundation’s budget and its ch anges, the financial reports and the
annual reports on foundation’s activities;
3) Approval of the procedure on manage ment of the foundation’s property;
4) Decisions regarding reorga nization of the foundation;
5) Election of new members of the foundation’ s board of trustees and adoption of
decisions regarding early suspension of authorities of members of the board of
trustees;
6) Decisions regarding the election of the pr esident of the board of trustees, the
manager of the foundation and other bodies envisaged by the charter, and early
suspension of thei r authorities;
7) Formation of other bodies of the foundation envisaged by the charter;
8) Decisions concerning the adoption of change s and additions to the charter of the
foundation, approval of new editions of the charter;
9) Decisions regarding the crea tion of commercial companies or participation in
them, as well as decisions regarding th e creation of separated subdivisions and
institutions and the adoption of the charters of the latter;
10) Supervision of the financial-econom ic activities of the foundation;
11) Hearing the reports of the manager of th e foundation with regularity envisaged by
the charter;
12) Supervision of the process of implementa tion of the board of trustees’ decisions;
13) Election of the person who sha ll conduct audits (auditor);
14) Fulfillment of other authorities envisaged by th is law, the charter, as well as those
authorities that have not been reserv ed for other bodies of the foundation.
2. According to the charter, issu es falling within the competence of the board of trustees
may not be transferred to other bodies.
3. The board of trustees has th e right to get acquainted with all the documents of the
foundation.

Article 26. President of the Board of Trustees

1. The president of the board of trustees is el ected by the members of the board according to
the manner stipulated by this law and the charter.
At any time, the board of trustees may reelect the president or elect a new president by
majority of votes of all its members.
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2. The president of the board:
1) Organizes the work of the board of trustees;
2) Gathers the sessions of the board of trustees and chairs them;
3) Organizes the recordi ngs of the sessions.
3. In case if the president of the board of trus tees is absent, one of the members, upon the
decision of the board of trustees, performs the president’s duties.
4. The president of the board of trustees shall ga ther the sessions of the board not less than
once a year. The president of the board of trus tees may also gather sessions of the board
upon demand of 1/3 of its members within 30 days following the demand was made.
If the president of the board of trustees does not gather a session within the stated period,
than the session may be gather ed by those who made the demand.
5. Elected co-presidents, according to the manne r and conditions stipulated by the charter,
may fulfill the authorities of the president of the board of trustees.

Article 27. Manager of Foundation

1. The manager of the foundation directs th e current activities of the foundation.
2. All issues regarding current activities of th e foundation fall within the competence of the
manager of the foundation, with exception of those issues that fall within the competence
of the board of trustees as envisaged by this law and the foundation’s charter.
The manager of the foundation organizes the im plementation of decisions of the board of
trustees.
The manager is elected and dismissed by the board of trustees. For the first time the
manager may be appointed by the founder.
The rights and responsib ilities of the manager of the foundation are st ipulated by this law,
the charter of the foundation and the contract signed with him/her. On behalf of the
foundation, the contract is signed by the president of the board of trustees or some other
person authorized by the board.
3. The manager of the foundation:
1) Manages the property of the foundation, including financial means, and makes
transactions on behalf of the foundation;
2) Represents the foundation in the Re public of Armenia and abroad;
3) Acts without a letter of attorney;
4) Issues letters of attorney;
5) In a stipulated manner signs contra cts, including employment ones;
6) Opens the foundation’s bank accounts, including foreign currency accounts and
other ones;
7) Presents for the approval of the board of tr ustees the internal work manual of the
foundation, the charters of the foundation’s separated subdivisions and institutions
and the commercial organizations esta blished by the foundation, the foundation’s
administrative-organizational structure, the salary scale;
8) Within its competence issues orders and directions, gives instructions, the
fulfillment of which is obligatory and supervises their implementation;
9) In a stipulated manner hires and dismisses from work the employees of the
foundation;

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10) Applies means of encouragement and disciplinary responsibility towards
coworkers.
The charter may also stipulate other aut horities of the manager of the foundation.
4. The manager of the foundation may hold paid positions at other organizations only with
the consent of the boa rd of trustees.
5. The board of trustees has the right to cancel the agreement signed with the manager at
any moment according to the manner stipulated by the law, the charter of the foundation
and the given agreement.

Article 28. Protocols of Session s of the Board of Trustees

1. The sessions of the foundation’s bodies are recorded. The protocol is formed within 5
days after the end of the sessi on, in at least two copies, and all the members present at the
session must sign it.
The chairman of the session bears responsibil ity for the truthfulness of information
recorded in the protocol.
2. The following information shall be mentioned in the protocol:
1) The date (year, month, day) and place of the session;
2) Number of people who had the right to participate in the session;
3) Number of participants;
4) Agenda of the session.
The protocol must contain information about main ideas of speeches made during the
session, the issues that were voted upon, the results of voting of these issues, and
decisions made by the session.

Chapter 5. Reorganization a nd Liquidation of Foundation

Article 29. Reorganization of Foundation

1. The foundation may reorganize only through uniti ng or merging, if this is envisaged by
the charter.
2. The reorganization of the foundation occurs by the decision of the board of trustees.
3. When the foundation reorganizes by means of me rging, it shall be considered reorganized
from the moment of state registra tion of the newly created foundation.
When the foundation reorganizes by means of uniting with another foundation, they shall
be considered reorganized, from the moment of state registration of cessation of activities
of the united foundation.
4. Within 30 days after the decision, regardi ng reorganization of the foundation, has been
made the foundation must notify all its debtor s about this. The notification must contain
information about the date (year, month, day) when the decision on reorganization was
made, the type and participants of reorga nization, as well as about the succession of
liabilities of the foundation.
5. Within 30 days after notific ation regarding the reorganization, the debtor of the
reorganizing foundation has the right to demand additional guarantees of fulfillment of
liabilities, discharge or early payment of liabi lities, as well as compensation of damages.

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Article 30. Merger of Foundations

1. The merger of foundations is the creation of a new foundation, by means of transferring
to it the rights and obligations of more than two merging foundations accompanied by
cessation of their activities.
2. The merging foundations shall sign an agreement regarding the merger. The decision
regarding reorganization by means of merger mu st be accepted by the board of trustees of
each of the merging foundations, which shoul d also approve the agreement on merger,
the transfer act, the procedur e and conditions of merger.
3. The joint session of the boards of trustees of the foundations participating in the merger is
considered the session of the board of trustees of the foundation created as a result of the
merger, which is gathered by the body and wi thin the period mentioned in the merger
agreement and which makes decisions on issu es envisaged by paragraph 3 of Article 10
of this law.
4. In case of merger of foundations, the rights and obligations of each of the foundations are
transferred to the newly created founda tion, according to the transfer act.
5. The merger agreement, the transfer act and other necessary documents, envisaged by the
law for the purpose of state registration caused by the merger, are to be presented to the
state registration body of legal persons.

Article 31. Union of Foundations

1. The union of foundations is the cessation of ac tivities of one or several foundations, with
the transfer of their rights and respon sibilities to a different foundation.
2. The foundations participating in the union shall sign an agreement regarding the union.
The decision regarding reorganization by means of uniting must be accepted by the board
of trustees of each of the uniting foundations , which should also approve the agreement
on the union, the transfer act, the pr ocedure and conditions of the union.
3. The board of trustees of the foundation, which was enlarged due to the union, shall adopt
decisions on making changes a nd additions to the charter of the enlarged foundation, on
approving the union agreement and the transfer act, and in case of necessity on other
issues as well.
4. In case of union of foundations, the rights and obligations of each of the uniting
foundations are transferred to the foundation, which was enlarged due to the union, in
accordance with the transfer act.
5. The union agreement (agreements), the transfer act (acts) and other necessary documents,
envisaged by the law for the purpose of state registration caused by the union, are to be
presented to the state regist ration body of legal persons.

Article 32. Agreement on Merger (Union)

1. The merger (union) agreement is concluded between the foundations participating in the
merger (union), it is signed by the manager a nd is subject to approval by their boards of
trustees.
2. The merger (union) agreement must contain the following information:

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1) Names of the participating parties, location, state registration data;
2) Terms, procedures and conditions of merger (union);
3) Terms and procedures for ga thering and holding the joint session of the boards of
trustees of the foundations partic ipating in the merger (union);
4) Procedure for voting during the joint session of the boards of trustees;
5) Other information on discretion of partic ipating parties of the merger (union).

Article 33. Transfer Act

The transfer act must contain provisions regarding the property of the reorganized
foundation (foundations) and the succession of all their liabilities towards the debtors and
creditors, including disputable ones.

Article 34. Liquidation of Foundation

1. Liquidation is the cessation of the foundation’s activities without the transfer of its rights
and liabilities to other persons in the order of succession.
2. Only the court, upon the demand of intere sted persons, may make a decision on
liquidation of foundation.
3. The foundation may be liquidated for the following reasons:
1) If the property of the founda tion is not sufficient for the realization of its activities
and the possibility of getting the necessary property is not real;
2) If the foundation by its activ ities has deviated from the goals envisaged by the
charter;
3) If it is impossible to reach the goals of the foundation, or to make changes in these
goals;
4) If the activities of the foundation endanger the safety of state and society, social
order, health and values of the co mmunity, rights and freedoms of others;
5) If the foundation has committed numerous or gross violations of the law, or it has
regularly carried out activities c ontradicting its statutory goals;
6) If the founder, while establishing the foundation, has committed gross violations
of the law or falsifications.

Article 35. Order of Liquidation of Foundation

1. After making decision on liquidating the foundation, the court shall form a Commission
on Liquidation, and shall define the order and terms of liquidation in accordance with the
RA Civil Code and this law.
2. Starting from the moment of its appointme nt, the commission on liquidation takes over
the authority of managing the affairs of the foundation. The commission on liquidation
acts on behalf of the fou ndation in the court.
3. Information regarding the fact of being in the process of liquidation (beginning and end
of the process of liquidation, composition of th e commission) is recorded in the register
of state registration body of legal persons, based on application of the commission on
liquidation.
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4. The commission on liquidation shall put an announcement in mass media means that
publish information about state registration of legal persons, information on liquidation of
the foundation and the procedures and terms of presenting claims by the debtors. This
term may not be less than 2 months star ting from the moment of publication of
information on liquidation, which is consider ed as the beginning of the process of
liquidation.
5. The commission on liquidation shall revaluat e the property of foundation, and shall use
measures for discovering debtors and receiving its debts, as well for informing debtors
about liquidation of the foundation.
6. During the process of liquidation, the f oundation has the right to conclude new
agreements and undertake new liabilities, only in case of necessity of completing current
activities needed for fulfilling its liabilities.
7. By the end of the term envisaged for presen ting claims by the debtors, the commission on
liquidation shall prepare a midt erm liquidation balance, which shall contain information
on the composition of the property of the liquidating foundation, the list of claims of
debtors, as well as the results of discussions regarding those claims.
8. The court shall approve the midterm liquidation balance.
9. After the midterm liquidation balance is approved, the commission on liquidation shall
sell the property of the foundation through public auctions, according to the manner
stipulated by this law.
10. The commission on liquidation shall make paym ents to the debtors of the liquidating
foundation in accordance with the sequence en visaged by Article 70 of the Civil Code
and the midterm liquidation balance, starti ng from the moment of its approval.
11. After satisfying the claims of the debtors, as well as in case if at the moment of approval
of the midterm liquidation balance the founda tion has no liabilities towards debtors, the
property is allocated for the accomplishment of statutory goals of the foundation, and if
this is impossible, is tran sferred to the state budget.
12. After completely distributi ng the property of the found ation, the commission on
liquidation shall prepare a liq uidation balance and shall present it to the court for
approval.
13. The commission on liquidation shall present the approved liquidation balance along with
other documents envisaged by the law to the state registration body of legal persons in
order to complete the state registra tion of liquidation of the foundation.
14. The liquidation of the foundation is considered complete, and its existence ceased, from
the moment of state registration.

Chapter 6. Accounting and Reports . Information about Foundation

Article 36. Maintenance of the Foundation’s Documents

1. The foundation must keep the following documen ts for the terms stipulated by the law
and other legal acts:
1) Certificate of state registration of th e foundation, the charter, additions and
changes made to the charter, the new editi on of the charter, the decision and the
agreement on establishment;
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2) Documents proving the prope rty rights of the foundation towards the property
indicated in the foundation balance;
3) Internal documents approved by its bodies;
4) Charters of its separated subdivisions and institutions;
5) Annual reports;
6) Accounting balance documents;
7) Financial and statistical reports pres ented to public administration bodies;
8) Protocols of the sess ions of its bodies;
9) Agreements signed by it;
10) Documents dealing with its financial-economic and other activities.
2. The foundation shall keep the documents envisaged by paragraph 1 of this article at the
place of its location.

Article 37. Accounting Balance

1. In accordance with the manner stipulated by th e law and other legal acts, the foundation
must keep an accounting balance and presen t financial and statistical reports.
The manager bears responsibility for orga nizing the maintenance of an accounting
balance, its state and truthfulness, for submitting in time the annual, financial and
statistical reports to the public administra tion bodies, envisaged by the law and other
legal acts, as well as for th e truthfulness of information be ing presented to the foundation
bodies and other persons in accordance with th e law, other legal acts and the charter.
2. The bookkeeping of administrative-managerial expenses of the foundation must be held
separately from other expe nses of the foundation.

Article 38. Supervision of Foundation’s Activities

1. The supervision of compliance with the law of the foundation’s activities is carried out by
the RA Ministry of Justice, and in cases e nvisaged by the law, also by other competent
state bodies, according to the procedures for their authorities, inspections and
examinations stipulated by the law.
2. In case of detection of such vi olations of the foundation of the law requirements, that can
be eliminated by measures to be undertake n by the foundation itself, the supervising body
or the authorized state body shall send to the foundation a written warning with
suggestions on the manner and terms of eliminating the violations.
3. The foundation has to notify in writing the RA Ministry of Justice within 15 days after
publishing the report envisaged by Article 39 of this law. In case if the foundation
publishes an incomplete report within the sti pulated period, the RA Ministry of Justice
shall send to the foundation a written warnin g suggesting to fix the lacks within one
month. If the foundation fails to publish the report within the defined time or does not
fulfill the demands of the warning, the RA Mi nistry of Justice may appeal to the court
with a demand on liquidating the foundation.

Article 39. Publicity of the Foundation’s Activities

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Within 6 month following the end of each fiscal year, the foundation has to publish the
following information in mass media means that publish information about state registration of
legal persons:
1) Report about its activities. The report has to include information about the programs
accomplished; sources of funding; the total amount of financial means used in the fiscal
year and in this total the amount of admini strative-managerial expenses; the usage of
property; the first and last names of the me mbers of the board of trustees, the manager
and persons engaged in the f oundation’s staff, if they have used the foundation’s means
and services within the accounting year.
2) Its annual financial report.
3) The conclusion about the financial report of the person who conducted the audit (auditor),
if the value of the foundation’s actives exceeds 10 million drams.

Chapter 7. Concluding Provisions

Article 40. Enactment of This Law

1. This law shall enter into force following 10 days after the day of its official publication.
2. Until creation of mass media means that publishe s information about state registration of
legal persons, the announcement envisaged by Article 39 of this law shall be published
by any mass media mean with a circ ulation of at least 1000 copies.
3. The foundations created before the enactment of this law, are not subject to re-
registration. Only those parts of their charters that do not contradict the law shall be acted
upon (until the charters ar e brought to compliance in the stipulated manner).
4. Those organizations created before the enactm ent of this law, whose organizational-legal
status is not that of a f oundation, but whose names contai n the word “foundation”, must
change their names (business name) within one year in the stipulated manner by
removing from it the word “foundation”. In case of failure to fulfill this requirement, the
name of the foundation is subject to cha nge through the court decision upon the demand
of the RA Ministry of Justice.

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