I. The Ministry of the Interior (hereinafter referred to as the Administration), for processing the interior operation on nonprofit entities’ (hereinafter referred to as Nonprofit entities) inception approval and supervision matters, hereby specifically enacted the guideline in accordance with relevant stipulations set forth under the Civil Code.
Government-donated nonprofit entities’ inception, approval and supervision matters shall sought by adhering to stipulations set forth under the Guideline, the Executive Yuan-enacted Government-donated Nonprofit Entities’ Asset Registration of Director/Auditor Tenure and Recusal Cautionary Measures, Government-donated Nonprofit Entities’ Director/Auditor Declaring with the Executive Yuan for Appointment Assignment Operating Regulation, Government-donated Nonprofit Entity’s Financial Supervisory Guideline and Government-donated Nonprofit Entity’s performance Evaluation Review Principle.
II. The definitions of the terminologies the guideline adopts are as follows:
(I) Nonprofit entity: Unless otherwise stipulated by law, it refers to nonprofit entities aiming to promote interior administration operation as the objective to render civil administration, household administration, land administration, people’s organizations, cooperative enterprises, police administration, construction, fire, military conscription administration, disaster rescue, arrival/department, and immigration operation or other pertinent interior administration operation and related services.
(II) Government-donated nonprofit entities: referring to the preceding section’s nonprofit entities in need of submitting their annual budget proposal and audit proposal, in accordance with the Budget Act Article 41 par 4 regulations and per the Legislative Yuan’s resolution, for review by the Legislative Yuan.
III. The term, “nonprofit”, shall supersede the name of a nonprofit entity.
IV. The inception of a nonprofit entity calls for setting up directors per stipulated under its donation chapter, and have the directors apply with the Administration for an approval per stipulations set forth under the Civil Code Article 59, and petition for a registration with the court where its main office is located.
Of nonprofit entities set up with will donations, the will executor is to apply for the approval.
V. Of government-donated nonprofit entities, the donation agency shall assign several directors; the percentage they account for the entire director quota shall be sought per the percentage of the donation agency’s donation funds to its initially registered total asset amount, and which also may not fall below one-half of the entire director quota.
The preceding section’s nonprofit entities shall appoint auditors, and the donation agency is also to assign several auditors; the percentage of the auditors to the entire auditor quota shall be sought per the percentage of the donation agency’s donation funds to its initially registered total asset amount, and which also may not fall below one-half of the entire auditor quota.
When par one’s nonprofit entities appoint a chairman, the donation agency may declare for the Executive Yuan’s approval to assign an individual to fill the position; when appoint a secretary general, chief executive officer, chief of general staff or manager, the donation agency may refer candidates and declare them for the Executive Yuan’s approval to fill the positions.
Of the appointment or referral appointment of the preceding three paragraphs’ personnel if the donation agency should be unable to do so for some reason, the competent government agency may do so instead.
The appointment or dismissal or the personnel set forth under par one to par three is to take effect when the donation agency or the competent government authorities’ written notice is delivered to the nonprofit entity.
Of government-donated nonprofit entities, when their budgets and audits are declaring with competent government authorities in compliance with the law, where involving change to the total asset amount, it shall also declare with the competent government authorities for approval or voluntary filing, to file for a change registration with said custodial court.
VI. Of government-donated nonprofit entities, when the content of their donation chapters should vary from par V and the Executive Yuan-enacted Government-donated Nonprofit Entities’ Asset Registration of Director/Auditor Tenure and Recusal Cautionary Measures, Government-donated Nonprofit Entities’ Director/Auditor Declaring with Executive Yuan for Selection/Appointment Operating Regulations, the Administration shall urge them to amend their donation chapters per legal proceedings prior to December 31, 2012.
VII. Nonprofit entities may only access the interest accrued from their donated assets but may not tap into the principal. However, of nonprofit entities having been incepted prior to the induction of the guideline, when their donation chapters come with other stipulations, the stipulations shall prevail.
VIII. The Administration, when reviewing a nonprofit entity’s inception application, shall fittingly weigh on whether its total donated asset amount suffices to achieve the inception objective and operations objective.
The minimum sum of the preceding section’s total donated asset amount is to be announced by the Administration separately.
IX. The Administration shall review of the donation chapter’s entry matters are as follows:
(I) The objective, name, main office and branch offices.
(II) The type of donated assets, total amount and safekeeping/utilization methods.
(III) Operating items and their management methods.
(IV) Of those with directors and appointing a chairman and auditors, the quota, qualification, method of generation, tenure and selection (dismissal) hiring matters and the disposition method if no reelection (reappointment) is made when the chairman’s tenure expires.
(V) The management board’s organization, fiduciary power and resolution voting method.
(VI) When defined with a sustaining period, the period.
(VII) The date, month, year the donation chapter is enacted.
Of those incepted with a will donation, if the will has not specified the preceding section’s stipulations, the will executor is to enact a donation chapter.
X. When applying for an inception approval with the Administration, the applicant shall prepare the following documents drawn in one format with triplicate:
(I) The application.
(II) The donation chapter or the will in photocopy.
(III) The donation asset catalog and its proof of documentation.
(IV) The director list and their national identification cards in photocopy. When appointing auditors, the auditor list and their national identification cards are in photocopy. If the directors, auditors do not hold the ROC nationality, it pertains to their passport or alien residency certificates in photocopy.
(V) The consent letter attesting their willingness to serve as director. When appointing auditors, the consent letter attesting their willingness to serve as auditors.
(VI) The nonprofit entity and its directors/auditors’ endorsement seal specimen or signature list.
(VII) The donor’s promissory consenting that when the nonprofit entity is approved for registration, the donated assets are to be transferred to the nonprofit entity.
(VIII) The operations plan.
(IX) Other administration-specified relevant documentation.
Those who may submit retroactive correction under the preceding section are notified to submit retroactive correction within a prescribed deadline; when failing to correct retroactively or making incomplete retroactive correction by the cutoff, the applications are overruled.
XI. Those applying for incepting as a nonprofit entity, when encountering one of the following circumstances, would to be approved per stipulations set forth under the Civil Code Article 59, and those having been approved shall be revoked or abolished in accordance with stipulations set forth under the Civil Code Article 34:
(I) The inception objective does not concern the interior administration or does not support the public interest.
(II) The inceptive objective or the operating items are in breach of the laws and regulations, public order or decent custom.
(III) The donated assets have not been committed or have not been transferred to the nonprofit entity as committed.
(IV) The operating items deviate from the inception objective.
(V) The underwriting operations are profit-based.
(VI) The total donated asset amount falls short of achieving the inception objective and operating missions.
(VII) Other matters in breach of the legal and regulatory stipulations.
XII. The Administration, in accepting the application for incepting a nonprofit entity, where it has been reviewed and approved, is to issue an inception approval document, and affix the official seal on the application and its appendages, with two copies returned to the applicant.
XIII. The Administration, when issuing the approval document per Article XI regulations, shall footnote the following matters:
(I) The inception approval-receiving nonprofit entity, upon receiving the inception approval letter, shall promptly file a registration with said custodial court, and also upon completing the registration declare the registration certificate in photocopy with the Administration voluntarily pending for further verification.
(II) Incorporated entities completing the registration shall apply with the local taxing authority where the office is located for the withholding entity’s inception registration, and also forward the withholding entity number to the Administration voluntarily pending for further verification.
(III) The donor or the will executor shall, upon completing the inception registration with the court, allot the entire donated assets to the nonprofit entity, and have the assets registered in the name of the nonprofit entity or deposited/held in a dedicated account, and also declare it with the Administration voluntarily pending for further verification.
(IV) If change occurs following the inception approval matter, it shall be declared with the Administration for approval, within thirty days following the change matter occurs, declare for a change registration with said custodial court, within thirty days following the approval, and forward said registration certificate in photocopy, within ten days upon obtaining the reissue of the incorporated entity registration certificate, to the Administration and the local taxing authority where it is registered at voluntarily pending for further verification.
XIV. Following a nonprofit entity is approved for inception, the Administration shall monitor the below matters in accordance with stipulations set forth under the Civil Code Article 32:
(I) Nonprofit entities shall, prior to the end of January every year, submit their yearly operating plan, funding budget proposal and other administration-specified relevant documents, declare them voluntarily with the Administration pending for further verification; and also, within five months upon concluding a year, submit the previous year’s executed operating report, funding audit proposal, asset catalog, fund deposit proof of documentation and other administration-specified relevant documentation, and declare them voluntarily with the Administration pending for further verification. However, government-donated nonprofit entities shall adhere to the Budget Act Article 41 par 4, the Financial Statement Act Article 22 par 2 and relevant legal and regulatory stipulations, compile the yearly budget proposal and audit proposal, which are subject to the board of directors’ (auditors) approval, and also declare with the Administration for review and approval before forwarding to the Legislative Yuan for review.
(II) The Administration may dispatch personnel to inspect a nonprofit entity’s organization and management method, whether it breaches the approval conditions, asset safekeeping, safekeeping/utilization status, financial standing, and public welfare performance.
(III) Nonprofit entities, in processing their various operations, shall utilize the donated assets and various income receipts by law, and also may not engage in the act of distributing the earnings.
(IV) Government-donated nonprofit entities shall present the yearly objective and performance evaluation report.
(V) Other legally stipulated matters.
XV. Nonprofit entities, on their current year’s various income receipts, may, depending on their actual operating needs and subject to the management board’s resolution voting, declare with the Administration for approval to allot up to twenty percent of the total amount as an operations development fund or reserve, and also itemize it as part of the itemized (allotted) year’s expenditure.
The foresaid operations development fund or reserve shall be deposited and held in a dedicated account, and which may not be accessed unless voted in favor by the management board, and duly declared with the Administration for approval.
XVI. When nonprofit entities encountering one of the following circumstances, the Administration may issue correction and also adopt improvement within a deadline, and when uncorrected by the cutoff, the Administration may abolish the approval per stipulated under the Civil Code Article 34, and also notify the court where the incorporated entity is registered at, where:
(I) When beaching the laws and regulations, its donation chapter or will.
(II) When its managing, operating method is deemed inappropriate or deviating from its inception objective.
If the directors or auditors failing to abide by the Administration’s supervisory orders, or obstructing the inspection, the Administration may cite the Civil Code Article 33 par 1 stipulations to levy a penalty fine up to five thousand dollars; when breaching the laws and regulations or its articles of incorporation sufficing to infringe on public interest or the incorporated entity’s gains, the Administration may cite the Civil Code Article 33 par 2 stipulations to request the court to cancel their fiduciary duties, and also enact other necessary dispositions.
XVII. A nonprofit entity, once its management board disbands it per the donation chapter, or when encountering the ministry revoking, abolishing the permit or when said governing court announces a disbandment, shall file for disbandment and liquidation conclusion registration in accordance with relevant regulations set forth under the Civil Code and the Non-Contentious Matter Law.
The division of a nonprofit entity’s residual assets following its disbandment is to heed to stipulations set forth under the Civil Code Article 44 or per its articles of incorporation or its will. Nevertheless, it may not be divided into any neutral person or profit entity. If unspecified by its article of incorporation or its will, the division of its remaining assets shall be allocated to the local self-governance organizations at the locale of its place of residence.