Registration of an amutah (non-profit organization)
- The process of opening the amutah.
- AMUTAH Registration fee.
- Organizational Structure of an Amutah.
- Contributions, donations and other financial matters.
- Tax benefits for public organizations.
- Accounting and reporting in AMUTAH
- Responsibility of founders
- Main reasons to turn to “Shmuel Brodetski Rohe Heshbon” for accounting support».
The main reasons to apply for accounting support to “Shmuel Brodetski Rohe Heshbon.” There are quite a lot of non-profit organizations in Israel. Most of them are registered and operated in the form of amutOt (pl of amutAh)
Amutah is a group of people united by a definite goal. Often tenants of a house or a residential district unite in the form of an amutah to repair common premises or improve local infrastructure and thus save on taxes. Sports sections, hobby clubs (tourism, fishing, gardening) also usually choose the format of the amutah to organize their activities.
If the founders set a socially significant goal and plan to carry out targeted charitable activities, such an amutah may become a non-profit organization and will be exempted from paying taxes. For example, supporting a particular sport, helping sick people or supporting retirees, helping them learn Hebrew and adapting new repatriates to Israel, and much more. In fact, any public initiative that requires legal status can be framed as an amutah.
The Ministry of Justice of Israel has a special department called rasham ha-amutot, which registers and follows up the amutot at the request of the founders.
The founders of an amutah may be both physical and legal persons, but at least 2 adults are required to register. The registration forms include their personal data, as well as their home addresses.
One of the main documents of the amutah is its charter. It describes the main provisions of the activities, goals and objectives of the charitable organization. On the site “Rasham ha-amutot” there is a standard example of the charter for an amutah. Drawing it up in accordance with the specifics of each particular non-profit organization will be assisted by a lawyer and a rohe heshbon.
Experts recommend to choose in advance several variants of the name for a new amutah.
The law contains a number of requirements for the name, including among others:
- it must not be used by existing charitable foundations,
- not to be misleading because of its similarity to state, commercial and other well-known organizations,
- it cannot use an abbreviation, as well as several languages,
- in the title, it is forbidden to claim exclusivity (e.g. all-Israeli, association of Russian-speaking, English-speaking, etc.).
An improper or “taken-up” name may cause a serious delay in opening the amutah. By the way, with the help of a lawyer in “Rasham ha-amutot” you can verify in advance whether the chosen name is already taken up.
A completed application form for registration of the amutah can be submitted to the Raham ha-Amutot personally (the office of the department is located in Jerusalem) or sent by post. It takes about a month to register a new amutah.
The registration fee for registration of a charitable organization (amutah) in 2018 is 816 shekels. It will also be necessary to pay for the services of a lawyer and a rohe-heshbon.
The Amutah is governed by The Council which is elected by a general meeting of its members. The general meeting usually takes place once a year. At the annual meeting, except for the Council, a supervisory commission and an auditor are also elected.
Decisions of the general meeting on the election or termination of the powers of the administration of the amutah are formalized by special protocols.
Accounting services are usually outsourced and are part of administrative costs.
The activity of the amutah is non-commercial. Contributions, donations and other financial benefits should be directed solely toward the implementation of the goals outlined in the amutah charter, which must be confirmed by relevant documents.
Financial resources of an Amutah can be generated by contributions of its members, voluntary donations of individuals or companies. Also, some socially significant projects can have public funding as the source. To achieve this, at least two conditions must be met. The first, to prove in practice that your amutah really helps people in the sphere for the development of which it was created. The second is exemplary reporting by the amutah and its status for tax benefits.
According to the law on taxation, some charitable organizations may receive a tax discount of 35% of the donated amount. To do this, the amutah must have the appropriate permission from the Mas Akhnasa. To get advice about the possibility of obtaining such a status you may apply to a rohe heshbon.
Any organization that receives money, including donations, must keep accounts, have books of registration of all cash receipts and expenses, and submit reports to the tax authorities.
An amutah may engage in commercial activities provided that the income from such activities is directed solely to achieving the goals and objectives prescribed in the charter, as well as to the administrative expenses of the amutah itself. For example, an amutah, in order to support new repatriates, can arrange paid educational courses, but the cost of the courses should not exceed the expenses on their arrangement. After all, if an organization gains an income, then the question of its taxation immediately rises.
Separately, it is worth noting that public organizations that have the opportunity to raise funds in the form of donations and distribute them as charity are under constant and thorough supervision of the state bodies.
Often, among the creators of the amutah, the question arises if it is possible to have an opportunity to attract government funding, as well as provide tax benefits to those who make donations. For this purpose, the amutah must submit annual reports about its activities to the relevant authorities. Such reports (as well as the budget of the amutah) must be signed by the Rohe Heshbon. If the reports are prepared correctly and there are no questions on the organization’s activities, a certificate on the absence of financial violations is issued.
- The annual report to Rasham ha-Amutot is submitted before May 31.
- Reporting to the tax authorities – before January 31.
Financial statements, as well as accounting principles, are very different from those of commercial organizations. For example, it is often necessary to take into account material (clothes, toys, products) and non-material (consultations, seminars, rent of premises) donations that do not always have an obvious cost in money terms. At the same time, as in business, the amutah should promptly (to be precise, immediately) record money and other donations in supporting documents (receipts).
Thus, successful functioning of the amutah depends not only on the enthusiasm of its creators, but also on the competent organization of financial reporting. An experienced rohe heshbon is indispensable here.
The founders of an Amutah are legally responsible for activities and, accordingly, violations in their organization. Fines and financial claims may be extended to them personally. Avoid such troubles through a competent arrangement of financial activities and accounting support.
- Many years of experience in working with commercial and non-commercial organizations. Our specialists will help to avoid the recurrence of common mistakes and to arrange accounting for the activity of the amutah as efficiently as possible.
- Saving time and effort. You can engage in exactly the activities for which your amutah was created and not waste time on opening an amutah, examination and further maintenance of the financial records of your organization.
- Absence of language barriers. We speak both Russian and Hebrew, therefore we can easily communicate with the customers in Russian “at home” and conduct document management for reporting in Hebrew.
- Legality. We will assist in opening and managing the activity of the amutah (including commercial activities) within the framework of the law, avoiding problems with taxation, as well as obtaining the statuses necessary for tax benefits.
- Rohe Heshbon and accountant all rolled into one. If the amutah has the need to undergo a regular audit and submit reports under the signature of the rohe heshbon, it is easier and cheaper when both services (accounting and audit) are performed by one company.
- Transparent rules of work and an acceptable cost of services. We do not attempt to obscure the essence of the services provided and their cost, you always understand what work and for what purpose we are performing for you.