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To European Law on the Third Region (28/05/2021)

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Non-profit organizations are an organizational typology that is prevalent in all European countries. With about 360,000 entities, Italy is not an isolated case. For example, there are currently 2 million associations registered in France; In Belgium (five times the population of Italy), in 2017, 110,000 associations were active; Germany has at least 23,000 bases; Ireland has less than 5 million inhabitants but more than 33,000 non – profit organizations (about 10,500 of which are registered charities).

The most widespread legal framework for non-profit organizations is the Association and the Foundation, for which there is a special discipline in all European countries. It finds its source in various source formalities (e.g., there are special laws regarding associations and fortifications in France; as in Germany and Italy, associations and fortifications are governed by the Civil Code; the very real one is the Code of Companies and Associations, adopted in 2019, with the caption) In addition, there are many common factors that vary from country to country.

Moreover, the legal forms of non-profit organizations are not just associations and foundations (as well as mutual communities). In fact, joint-stock companies and non-profit co-operatives and non-profit organizations are increasingly recognized in the legal systems of EU member states. In Italy, for example, limited-profit companies can assume the status of social enterprises, and social cooperatives – which are rightly social enterprises – are intended to pursue the common interest of society. Similar to Italian social cooperatives, there are French collective interest cooperatives and cooperatives recognized as social enterprises in Belgium.

Thus the non-profit area becomes more and more legal, meaning that all legal forms can be legally assumed for a purpose other than the distribution of profits. What happens in some countries, such as Germany and Ireland, where the law makes it clear that companies have “any legitimate purpose” is symbolic of what happens, so there is no intention to divide profits (instead of continuing to give art in general. 2247 Our Civil Code).

In addition, the comparative analysis reveals that a level of public use is generally anticipated in the laws of member states and that the use of non-profit organizations is considered. Symbols are examples “Charity“In Ireland (governed by the new Charity Act of 2009, which came into force in 2014), the law of an entity”For charitable activities“, Ie with public utility requirements in Germany (in accordance with Article 52, sec. Of the German Tax Code).

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In some countries, the legislature establishes new social utility statuses that go beyond the classic status of public utility for two main reasons. First, because acquiring them is also permissible for entities with features of exclusive performance of business activities. Second, because their acquisition is also permissible for companies that distribute profits to their shareholders within certain limits. Thus, in these categories, different legal forms (associations, foundations, companies, cooperatives) as well as non-profit entities and only partial entities co-exist. The most recent examples are the status of the Third Region, which was recently introduced by a member of the Italian Legislature, and the status of a social and cohesive economic institution governed by French law in 2014.

Therefore, this legislation seems to be in line with the ideological evolution that has been witnessed for many years. The non-profit sector in the strict sense is being replaced by broader sectors (defined in Europe in various ways: the third sector, the socio-economy, civil society, etc.) in the discourse of economists and sociologists. And the entities they compose (as well as possessing other needs, including organizational), and lack of profit motives.

A very interesting attempt in this sense – with a provocative headline “Beyond Nonprofit Organizations: Looking for a Third Region”- This was recently conducted by a group of scholars as part of a research project on a third region in Europe. (1) The study suggests discussing a broader “third sector” or “socio-economic sector” that includes not only “classic” non-profit organizations, but also all organizations that are characterized by the purpose of public use.

The United Nations is also changing its approach to the issue, recognizing the positive contributions they have made to the economy and society, and their closeness to more traditional non-profit organizations. In the 2018 Handbook of the Nonprofit Satellite Account, an update to the previous handbook from 2003, the United Nations now “Third or Social Economy (TSE) sector”, Which includes non-profit organizations and other affiliates affiliated with them, which are non-profit but, like the latter, primarily meet the needs of the social or public interest and are not regulated by governments. (2)

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At the level of EU law, non-profit organizations have no specific discipline, while other legal entities – such as joint-stock companies and co-operatives – have special European restrictions.

Since the 1990s, there have been numerous attempts to introduce a European discipline of associations, foundations, and interfaith communities, all of which have failed.

Can results not achieved in previous decades be achieved today? Is it possible to achieve a European rule for associations and other non-profit organizations?

Since the benefits of this legislation are very large and varied in nature, the difficulties inherent in the project should not be ignored. Differences in discipline between European countries are very important, which, along with other factors, achieve a complex goal, though not impossible.

However, some options may be foreshadowed.

The first is to return to the assumption that the European Legal Association, the Founder Foundation, and the Mutual Community are represented by European regulations similar to those already used to establish the European Company and European Cooperation. However, it is a complex strategy to implement for the same reasons that led to the failure of previous attempts over the past thirty years (first, the consensus of member states is unanimously required).

The second involves looking for a system of better collaboration that is referred to in art. 20 of the treaty with the European Union, especially to overcome the unity of the consensus. (3)

The third involves establishing the legal status of the “European Third Sector Body”: a kind of cross-border mark that can be achieved by all entities with the minimum requirements identified in the legislation in each member state.

This strategy – theorized by the author for the first time in a previous study on social enterprises (4) and approved by the European Parliament in Resolution 2018 – will have the benefit of resolving a number of issues raised by the current lack of European discipline. For this, Without the need to overcome all the crises that have to be faced and resolved by an accurate legislation based on legal forms. The European status will in fact be based on the possession of certain necessities, while the rest will be governed by the applicable national law of the region. Eligible entities are recognized by all member states and must be guaranteed the same discipline as national law firms with the same status. This also applies to finance. For example, if a national body with the qualifications of a “European Third Sector Body” is likely to accept financially favorable contributions (as articulated in Article 83 of our Third Sector Code), a foreign body with the same qualifications may automatically qualify for a comparison or compatibility test. It must be without success.

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As for the requirements of the status of the “European Third Sector Body” inspired by the national laws in force on the subject, they may be:

1) the nature of a private entity (not public or regulated by public entities) regardless of the legal form of the merger (association, foundation, company, etc.);

2) a specific inquiry into the purposes of the public utility (or social utility);

3) the obligation to use resources, including annual profit and operating surplus, for special utility purposes for public utility purposes, however, the remuneration of capital provided by shareholders (in institutions in the form of capital companies);

4) the obligation to comply with certain organizational and transparency obligations required to ensure the required consistency between activity and goal;

5) registration in public registers, it is necessary to know that the status is held, especially in countries other than the incorporation, the subsequent general regulation;

6) Submission to public regulations aimed at finding out the possession of requirements for acquisition and maintenance of status.


1) Cfr. Solomon LM, Sokolovsky W., Nonprofit: In Search of the Third Region, Enzol‌ras b. Ideas, Implications, Challenges, and Opportunities, by Palgrave Macmillan, 2018, p. 7 ff.

2) Cfr. Satellite Account of the United Nations, Nonprofit and Related Organizations, Volunteer Work, New York, 2018.

3) Cfr. BREEN OB, Expanding Space for European Charitable Activities, A Daphne / EFC Commissioned Study, 16 January 2018.

4) Cfr. FICI A., A European Statute for Social and Solidarity Based Enterprise, European Union, Brussels, 2017.

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