sample essay of BTX5090

this is a group assignment, and i can't remember the marks, but not high...anyways, thanks the other group member. this is the brief paper of the presentation

1.Company Background


We are solicitors of Arthur law firm which provides quality legal advice to the not for profit sector. Australian Love Life seeks our advice about the rules of incorporation for not for profit organisations in China and Thailand as they intend to set up headquarters in these countries. Australian Love Life is an Australian relief organisation provides emergency relief in response to disaster such as earthquake, typhoon and bushfire or anyother disater event. Their aim is always there for people in need, providing relief in times of crisis and care for the most vulnerable in Australia and worldwide. Australian Love Life owned a for profit subsidiary in Thailand. Currently, Australian Love Life has 20 members and has no money but would like to raise money through fundraising event such as marathon.

2.Country Background

The historical importance of Non For Profits in China can be recalled to 700 BC from educational, religious and political areas. Moreover, the last century has seen the third sector, formalized, legalized in China for the Not for profit organizations are relatively new to the country.

While on the other hand, historically, non-governmental organisations (NGOs) in Thailand were mostly family-based foundations. However, domestic NGOs have become increasingly linked with international NGOs in recent years. This change in the domestic NGO sector has been closely linked to the 2005 Tsunami, which led to a large influx of funds, particularly from abroad, and severely tested the capacity of the sector and its regulators.

3.1 Registration in China

The People’s Republic of China is a civil law country with three primary forms of nongovernmental, not-for-profit organizations:

1. Social organizations: Social organizations, which are essentially associations of various kinds, are the primary NOP form in the PRC.

2. Foundations: A foundation is a not-for-profit organization that promotes public benefit undertakings through grants and donations.

3. Civil Non-enterprise institutions (CNIs): CNIs are “social institutions established by enterprises, institutions, social organizations, or other social forces as well as individual citizens using non-state assets and conducting non-profit-making social service activities.

The three types of NPOs are not government agencies, though they are generally closely linked to the state through various establishment and oversight mechanisms.

A fourth type of organization, the Public Institution, is a quasi-government agency, generally formed by the government and staffed with government employees.

A fifth type of NOP is the public benefit or charitable trust, which resembles the charitable trust in common law. The government has yet to implement the legislation, so this form of NPO I not very common in practice.

The authorized government department to approve the application is the Department of Civil Affairs (Min Zheng Bu), deals with registering and incorporates a social organization or TSO in China. The Regulations for the Management of foundations (2004) govern the establishment and operations of representative bodies of foreign foundations. Domestic nonprofits must register under a dual-management system that includes strict approval procedures and investigation, supervision, and periodic review. INPOs are also subject to these restrictions, which are generally much more stringent than most business approval procedures. Documentations needed to provide when a foreign foundation seeking to establish a representative body in China should provide documentation to the registration authority are: a letter of application; proof of legal registration in its home country and a copy of its charter; proof of the identities and curricula vitae of the persons who will act as responsible persons in the representative body; proof of place of business; and a document attesting to the decision of the professional ministry or agency in China to permit it to establish a representative body in China. Not only does the registration process pose significant barriers, the operation also faces subsequent restrictions. For example, a representative office of a foreign foundation may not raise funds or receive donations in China. Several aspects of the registration system also run counter to international not- for- profit organizations (INPOs) interests.

3.2 Registeration in Thailand

The Australian relief organisation, a foreign NGO that intends to set up headquarter in Thailand and to do charity work for Thai people may register as either an association or a foundation in Thailand. Association and foundation are two common types of NGOs that exist in Thailand. An association is a group of persons from the private sector who share the same interest to conduct non-profit activities. They are members' organisations which are not required to hold capital. A foundation is a not-for-profit asset set up for public benefit. Public benefit purposes include charity, religion, art, science, literature, education and other activities in the public interest. It excludes activities harmful to Thai culture, morals, and national stability and political activities. NGOs that provide benefits exclusively to non-Thai nationals may not be registered.

All associations and foundations must register with the Ministry of the Interior, according to the Act of National Culture 1942 (amended 1944) and the Civil and Commercial Code. NGOs working in the fields of culture or religion also need to register with the relevant Ministry (Office of the National Culture Commission or Ministry of Religious Affairs).

3.2.1 The registration process in Thailand :

Registering organisations must submit a standard application form, as created by the Ministry of the Interior, to their district authority (the Bangkok Metropolitan Office in Bangkok). With their application they are required to submit copies of the NGO’s regulations, minutes of the meeting of the founders, location and map, names and details of committee members (including the identification of foreign nationals, biodata and copies of ID cards for Thai nationals, and household registration of the founders). In addition, foundations must submit a bank statement, names of authorized persons to receive transfers, a contract to transfer assets to the foundation, and details of funders' gifts and confirmation of their gift.

Following initial scrutiny, the application is referred to the registering authority. The registering authority is the provincial governor or (in the case of Bangkok) the Ministry of Interior. The responsible office consults with other government departments and agencies to scrutinise the purposes of the NGO and the background of the NGO officials. Registered organisations receive a certificate of registration with a registered number. The registration fee for a foundation is 200 Baht, 2,000 Baht for an association.

NGOs must have a governing document that includes name, objectives, location and procedures relating to membership applications, member's fees, qualification of committee and requirements for asset and accounting management.

There are some additional requirements. Associations must have AGM procedures and rules that:

1. The founding members must consist of at least 3 persons

2. The committee should consist of at least 10 but not more than 15 persons

3. The terms of the committee should be 2 years but not more than 4 years

4. There should be a specified time for committee meetings and an annual assembly.

Foundations must have a capital (a permanent endowment, of which the income can be spent but not the principle) of 500,000 Baht or 200,000 Baht for 'government foundations' or those that pursue activities in the fields of social welfare, education, sport, religion, health or to relive public disaster. Some foundations predate this requirement and are allowed to operate with a smaller fund. This capital fund must be maintained throughout the foundation's working life.



4.1 Regulations in China

There are few clear rules about the status of foreign associations in China, and the status is subject to case-by-case scrutiny and discretion of the Ministry of Civil Affairs and other competent authorities, such as the ministries governing professional work in specialized fields (i.e. Ministry of Health; Ministry of Education). However, the Regulations for the Management of Foundations (2004) govern the establishment and operations of representative bodies of foreign foundations.

4.1.1 Requirements for Creation

Representative bodies of foreign foundations should engage in public benefit activities that are appropriate for the nature of public benefit enterprises in China. Foreign foundations assume civil legal liability for the actions of their representative bodies in China in accordance with Chinese law. The NFPs may apply for formal registration only after the leading professional unit agrees to serve as its sponsor. The NFPs must also meet capitalization requirements to be approved. For example, a minimum capital of ¥8 million ($1.2 million) paid in cash is needed for a nationwide public foundation to receive registration approval.

4.2 Regulation in Thailand

Foreign NGOs must act in accordance with Ministry of Labour and Social Welfare’s regulation on The Entry of Foreign Private Organisations to Operate in Thailand B.E. 2541 (1998) and be approved by the Committee on Consideration of the Entry of Foreign Private Organisation (FPO). The Committee is chaired by the Permanent Secretary or Deputy Permanent Secretary for Labour and Social Welfare and includes representatives from a range of government agencies. The FPO Committee is hosted by the Department of Employment (in the Labour Ministry) and supported by a secretariat.



For Foreign NGOs, initial scrutiny is by the FPO Committee secretariat, which checks that an organisation qualifies as a non-profit NGO with objectives and plans that meet requirements. The application is then referred to the FPO Committee, which considers background checks on individuals and the organisation and submissions from various government agencies on a range of issues, including security and domestic issues.

4.2.1 Reporting requirements

For foundations, provincial offices of the Ministry of Interior are required to collect information (including number of the members or names of new committee members; copies of the agenda of the committee meeting; and copies of the annual report) and undertake regulatory inspections.

There are no specific reporting requirements for associations nor is it necessary to provide information to the authorities.

Foreign NGOs must report to the Department of Employment every 6 months on projects and/or activities that were carried out to target group, area and budget. Failure to comply may result in withdrawal of permission to operate. Foreign NGOs are visited and monitored by the FPO Committee secretariat.

5.1 Recommondation for Australian Love Life

In this case, according to the nature of the five types of NPO in China and the characteristics of Australian relief Organisation, it is recommended that it should choose Social organizations as its legal structure.

For Thailand, Australian Love Life should incoporate as association because they have more than three members and has no money. Association in Thailand is inexpensive as no capital required and simple as no specific reporting requirement.



6.1 Special tips for Australian Love Life

Whilst many Australian’s may recount stories of holidays in Thailand and visiting sun drenched beaches, however the modern reality of the kingdom is a little different and there are several important tips to consider for Australian Love Life:

• Getting more the information soure

• Location & efficiency of the Org.

• Respect the local culture

• Consider the under table practice

In the recent times, the unstable political situation is of concern and planning far into the future is difficult when you cannot ascertain even if the airport will be open or surrounded by protestors 3 months in advance. As a relief Orgnisation, careful monitoring of the situation by print media, websites and independent television is needed.

The organisation must also be nimble and be able to move quickly if the situation were to deteriorate, where offices or country re-location may be required. The aid organisation must also consider that they will need to move quickly to help, if situation deteriorates, and aid is required.

The local government has recently extended the martial law throughout many provinces in the kingdom, and there is an indication that this will extend into the future. Couple this with no willingness to call elections, threatens to upset the opposition ‘red shirts’.

And also one important note is the Thai’s extreme loyalty to the King, this must be respected at all times all places, and any negative remarks against the royal family has been known to see many westerners in trouble with this culture aspect. The king has the ultimate reputation and support.

The Australian Love Life will need to educate their staff on the loyalty of the Thai’s and the respect that they give to the loyal, which is often regarded to in a similar manner as the Japanese loyalty to their wartime emperor.

Last but not least, the less well known problem of Thailand is that graft is a major concern, and bribery is common place, and can range from local store owners through to government officials and even the police force. In 2008 Juree Vichit-Vadakan has mentioned the under table practices of Thailand in her book “Comparative third sector governance in Asia”, she stated: non-transparent practices (e.g., bribery, nepotism, fraud) were common among corporations listed in the stock market.

As a non-for-profit orgnisation still can hold for profit subsidiary to raise money, in this case Australian has a fully own subsidiary for profit to raise funds, therefore Australian Love Life will need to consider the effects that to ‘get things done’ they may be required to line the pockets of some local official to even gain simple benefits that they would expect . However that might raise another issue, the ethical dilemma. Get things done? Or do the good thing? Australia Love life needs to take it into consideration.