By: Luis Gerardo Ramírez Villela
Civil society organizations carry out their day-to-day operations in accordance with the normal operation of any business, regardless of the legal nature of each organization.
In this respect, it is very important to consider that they must carry out their operations like any other business, filing declarations to tax authorities, and signing the corresponding contracts/agreements according to their business needs.
As these are civil society organizations that are mostly authorized as donees (donatarias), the most relevant contract would be the donation agreement.
The donation agreement is an essentially free, unilateral, instantaneous, nominated, commutative, formal, principal and consensual agreement as opposed to real, and its main regulation is found in the Federal Civil Code (Código Civil Federal), in the Civil Code for Mexico City (Código Civil para la Ciudad de México) and the civil codes of the other states (it will be necessary to review the applicable legislation of each organization to fully comply with the specific requirements).
By virtue of the donation, the donor undertakes to deliver to the donee, free of charge, part or all of his present assets, reserving what is necessary to live according to his circumstances. In the specific case of authorized donees, the donation received will give rise to the issuance of a deductible receipt (CFDI) that complies with the tax provisions applicable to the donee.
It should be noted that, in the case of donations from abroad, donors may grant them under the Agreement to Avoid Double Taxation (Convenio para Evitar la Doble Imposición) entered into with that country, provided that the donee is published in the corresponding annex of the current Miscellaneous Fiscal Resolution (Resolución Miscelánea Fiscal).
There are other contracts/agreements that, due to the very nature of civil society organizations, become relevant to their daily operations, such as: (i) collaboration agreements with other organizations, and (ii) contracts for the provision of services, whether with individuals or corporations; among others.
Other contracts that are commonly used by civil society organizations would be the lease agreements, bailment agreement, individual employment agreements, agreements with advisors, etc.
It is very important that civil society organizations receive adequate advice not only on legal issues but also on accounting and tax issues, since their operations are similar to those of any other company of a commercial nature.
