The Supreme Court of Cassation („SCC“) issued an important resolution that affects the names of non-profit associations. In its Resolution № 45 of 03/04/2024 under Case № 2239/2022, SCC clarified that non-profit associations cannot use names of public legal entities, as this may mislead the public about their legal status and activity. This resolution emphasizes the importance of a clear distinction between different legal entities and the need to comply with legal requirements when establishing them.
Both legal entities and non-profit associations are individualized as legal entities by the scope and the purpose of their activity, their name, the seat and management address , their governing bodies and their property. If the law has not been complied with during the establishment of the non-profit association, a procedure is provided for its termination by bringing a claim by the authorized persons before the relevant district court.
In this regard, the SCC accepts that the name of the non-profit association is of key importance for distinguishing it from other legal entities, including those of public law, with which the latter participate in public relations and civil turnover. In view of the importance of this individualizing mark, the legislator has set the requirement that the name does not mislead and does not harm good morals. In cases where this requirement is not met, a special order is provided for the termination of the association.
The use of the name of a public legal entity by a non-profit association is considered misleading. This is because such a name may give the impression that the association carries out the activities assigned by law to the relevant public entity. In its Decision, the SCC rules that if an already existing name of a public legal entity was chosen during the establishment of a non-profit association, the establishment is contrary to the provisions of Art. 7, para. 2 of the Non-profit legal entities act (NPLEA).
Such a situation, in which the name of a registered non-profit association contains the name of a public legal entity, falls under the factual composition of Art. 13, para. 1, item 3, l. “a” from NPLEA. As a result, the association is subject to termination by a resolution of the district court.
This resolution of the SCC clearly emphasizes the importance of the correct and lawful naming of legal entities – to avoid confusion and deception in the public regarding their activity and legal status.
