Cap. 492 Art. 2Definitions.

(1) In this Act, unless the context otherwise requires:

"administrator" means any person who is appointed to control, supervise or administer an organisation, and includes a governor, director, trustee or committee member or any other person who carries out such functions even if under another name but shall not include a manager or an executive while carrying out functions under a contract against remuneration except in so far as he is an administrator and only relating to his functions as an administrator; "charitable purpose" means a social purpose; "charitable trust" means a trust as defined by the Trusts and

Trustees Act which is established for a social purpose; "the Commissioner" means the person appointed by virtue of article 5; "controlled by a religious organisation" means that the religious organisation or the authority representing the same under the applicable Canon law or other legislation governing religious organisations, has the power, whether directly or indirectly, to nominate, appoint, change or remove more than half of the administrators of the organisation;

"controlled by the Government" means that the Government of Malta has the power, whether directly or indirectly, to nominate, appoint, change or remove any of the administrators of the organisation;

"controlled by, related or affiliated to a political party" or similar terms means, in the case of the controlled, related or affiliated organisation, that:

(a) its statute, financial statements or other documents expressly state that it is controlled by, related or affiliated to the political party; or

(b) it has been established by the political party which supports it financially; or said Act or otherwise:

(i) has the power, whether directly or indirectly, to nominate, appoint, change or remove more than half of the administrators of the organisation; or

(ii) is a beneficiary, in any manner and at any time, of the income or capital of the organisation; or

(iii) is the beneficiary of the purposes of the organisation, including the promotion of the specific vision, policies and goals of the political party or its candidates; "the Council" means the Malta Council for the Voluntary Sector established by article 35; "ecclesiastical entity" shall have the meaning assigned to it by article 26 of the Second Schedule to the Civil Code; "Financial Intelligence Analysis Unit" means the unit set up by article 15 of the Prevention of Money Laundering Act; "funding of terrorism" means the conduct described in articles 328B and 328F to 328I, both inclusive, of the Criminal Code;

"Government" means the Government of Malta, and includes any Local Council, statutory corporation, public agency and other organisation of whatever legal form controlled by the Government and also includes the President of Malta; "interested party" means a person who is given rights capable of economic valuation, present or future, actual or contingent, in the statute of an organisation or who is given powers or functions therein and shall not include other persons unless the context otherwise requires, and this, without prejudice to the right of any person to pursue any civil right or remedy he may have;

"lawful purpose" means a purpose other than a social or public purpose or public benefit, being a legitimate purpose in terms of these provisions and which may include a private benefit, provided such private benefit is subject to the following conditional requirements:

(a) it is solely limited and incidental or ancillary to the principal purpose and objectives of the organisation;

(b) it is not directly attributable to private individuals or members of the organisation; and

(c) it is not capable of promoting any form of private interest, irrespective of whether or not such private interest involves any economic interests, or any form of economic contributions, or is otherwise capable of economic evaluation; "market conditions" and "market levels" mean:

(a) in the case of goods, the standard price normally paid form and operating in the same or in a similar area of activity; and

(ii) to persons in the same or in a similar office or role and, or under the same or similar conditions and having the same or similar qualifications; and

(c) in all other cases, the normal commercial standards: Provided that, on a local level, such market levels and conditions shall be applicable:

(i) in the case of voluntary organisations with a generated revenue and income of less than fifty thousand euro (€50,000), these shall be made subject to Category 1 enrolment organisations in terms of the Voluntary Organisations (Annual Returns and Annual Accounts) Regulations;

(ii) in the case of voluntary organisations with a generated revenue and income exceeding fifty thousand euro (€50,000) but less than two hundred fifty thousand euro (€250,000), these shall be made subject to the General Accounting Principles for Small and Medium-Sized Entities (GAPSME) in terms of Accountancy Profession

(General Accounting Principles For Small And Medium-Sized Entities) Regulations and shall apply without prejudice to the Voluntary Organisations (Annual Returns and Annual Accounts) Regulations; and

(iii) in the case of voluntary organisations with a generated revenue and income exceeding two hundred fifty thousand euro (€250,000), these shall be made subject to full audit by an auditor and the International Financial Reporting Standards

(IFRS) shall apply:

Provided further that, for the above principles to apply, reference shall be made to prices, standards or levels of the market in the country where the relevant activities take place: Provided also that, in case of international organisations, which operate from Malta, or in case of local organisations, which operate internationally, such organisations shall be subject to International Financial Reporting Standards (IFRS) which shall apply without prejudice to the Voluntary Organisations (Annual

Returns and Annual Accounts) Regulations;

"Minister" means the Minister responsible for voluntary organisations;

"non-profit making", "not for profit", "non-profit" and similar phrases shall be interpreted, as the context may require, in accordance "pious foundation" shall have the meaning assigned to it by article 26 of the Second Schedule to the Civil Code;

"political party" shall have the meaning assigned to it by article 2 of the Financing of Political Parties Act and, for the purpose of this Act, shall include any other organisation, of whatever legal form, which is controlled by, related or affiliated to the political party, and the terms "political candidate" and "political organisation" shall be construed accordingly; "political purpose" means the promotion of the interests of a political party or a political candidate, whether at local, national or international level;

"promoter" means a person who promotes the establishment of an organisation or holds himself out to third parties as such; "public agency" means any entity of any legal form which is established to carry out public administration in terms of the Public

Administration Act or any other law and includes a statutory body; "public collection" shall have the meaning ascribed to it in the Public Collections Act: Provided that for the purposes of this Act, the term "public", within the context of collections, shall not include existing founders, members or donors of a voluntary organisation, even if in large numbers, nor shall it include a group of less than fifty persons taken on one or more occasions; "public purpose" or "public benefit" means a social purpose which:

(a) promotes or serves the general public interest or the interest of a sector of the general public, whether directly or indirectly: Provided that:

(i) if, in the opinion of the Commissioner, the organisation does not reach sufficient levels of promotion or service to the general public interest or the interest of a sector of the general public, he may decide that this criteria is not satisfied; and

(ii) such purpose is not to be presumed to exist only because the organisation has a "social purpose" as defined in this Act;

(b) does not promote or serve any private benefit unless such benefit is solely limited and incidental or ancillary to the principal purpose and objectives of the organisation and as permitted by this Act and, or the Second Schedule to the Civil Code;

(c) is of a continuing nature and shall apply throughout the Civil Code;

"religious organisation" means:

(a) a pious foundation;

(b) an ecclesiastical entity and qualifies as a diocese, parish, church or place of worship, province or similar division of any religious order, institute of consecrated life and a society of apostolic life or an ecclesiastical community; or

(c) a hospital, school, teaching or counselling institute, orphanage or residential or respite centre available to the public, which is controlled by a religious organisation referred to in paragraphs (a) and (b), whether supported by volunteers or otherwise; "remuneration" means any honorarium, wage, salary, fee or other payment for services, whether under a contract or otherwise, but shall not include the refund of any expenses incurred on behalf of any organisation;

"social purpose" means any charitable or philanthropic purpose, and without prejudice to the generality of the aforesaid, includes:

(a) the advancement of education, including physical education and sports;

(b) the advancement of religion;

(c) the advancement of health;

(d) social and community advancement, including the promotion of the ethical, educational and social aspects of a particular profession or trade, but which does not include the promotion of any private economic interest;

(e) the advancement of culture, arts and national heritage;

(f) the advancement of environmental protection and improvement, including the protection of animals;

(g) the promotion of human rights, conflict resolution, democracy and reconciliation;

(h) the promotion or protection of the interests of other public benefit organisations, including federations of such organisations;

(i) the carrying out of activities intended to raise funds to support other public benefit, non-profit or voluntary organisations or to generally support the voluntary sector as a whole or parts of it through the application, grant, transfer or otherwise making available of funds so raised to them or for their benefit; or

(j) any other purpose as may be prescribed by the Minister by means of regulations made by virtue of constitutive instrument or public deed of the organisation whereby such organisation is established, including a will which provides for the setting up of such organisation;

"temporary organisation" means an organisation established for a specific purpose which can be achieved within less than a year as provided by article 16; "Tribunal" means the Administrative Review Tribunal established by article 5 of the Administrative Justice Act;

"voluntary" in the context of a voluntary organisation means the existence of two or more of the following elements:

(a) the overall control of the organisation is exercised by administrators who do not receive any remuneration for their services for carrying on functions of administrators except as permitted in this Act;

(b) the organisation is created by the endowment of voluntary and gratuitous grants and the organisation’s affairs are supported, at least in part, by such voluntary or gratuitous grants or by services rendered on a voluntary basis;

(c) in the case of an association, subject to limitations due to the nature or size of the organisation and subject to any discretion which may be exercised in terms of the statute of an organisation by the administrators or a membership committee, any person can join the organisation or participate in the activities of the organisation and every participant in the organisation has the right to freely leave the organisation: and Provided that:

(i) when a voluntary organisation is established in the form of a foundation, only one of the above elements must exist for the organisation to be considered to be "voluntary";

(ii) when a member of a religious order or authority carries out functions in a voluntary organisation without remuneration, such functions shall be considered to be "voluntary" for the purposes of this definition if he or she is not appointed or engaged to do so as a means to carry out his vocational duties by the religious order or authority of which he or she forms part;

(iii) for the purposes of paragraph (c), only those limitations and discretions which are consistent with the Constitution of Malta and the European Convention Act shall be considered to be valid limitations and discretions; established by article 37; "voluntary sector" includes voluntary organisations, volunteers, donors who make voluntary grants of money or assets to voluntary organisations, beneficiaries of the services of volunteers and voluntary organisations and administrators of such organisations; "volunteer" means a person who provides unremunerated services through or for a voluntary organisation.

(2) Unless otherwise expressly defined in any other law or the context requires otherwise, the terms "charity", "charitable", "non-profit", "non-profit making", "philanthropic", "social purpose", "public benefit", "public purpose", "voluntary" , "voluntary organisation" and variations or derivatives thereof when used in other laws, shall have the meaning ascribed to them by this Act.

(3) The registration of a voluntary organisation as a legal person in terms of the Second Schedule to the Civil Code shall not imply enrolment of that organisation in terms of this Act.

(4) Enrolment of a voluntary organisation under this Act shall not imply:

(a) that the organisation has legal personality; or

(b) that it is a registered organisation, in terms of the Second Schedule to the Civil Code; or

(c) that the liability of its administrators under applicable laws is affected in any manner.