11/06 2018

Legal Representatives for Religious Institutions

Religious Institutes (“RI”), as is well known, conduct their operations under the governance of canon law.

Such institutions are not an isolated microcosm, however; indeed, liaising with their economic and commercial counterparts is now more important than ever.

Therefore, religious institutions must have a legal status that would allow them to enter into contracts and agreements with vendors, employees, consultants, etc., who otherwise might be reticent to do so.

More specifically, any type of religious institution (dioceses, convents, etc.) might become a statutorily recognised entity as a precursor to being able to enter into legal agreements that are binding under Italian law.

To that end, the ecclesiastical entity shall appoint a legal representative, who is simply a natural person to whom authority has been granted to act in the name of, and on behalf of, the organisation to which such person belongs. In other words, a person who act in a manner that has legal effects on, and binds, the Ecclesiastical Entity.

Identifying the Legal Representative

There are two phases to identify a legal representative:

  1. Phase I: The “in-house” phase in which the canonical authorities identify a legal representative pursuant to institutional bylaws.
  2. Phase II: Following that initial phase, there will be a second in which the institutional intent and its internal effects will be made public via recording in the Prefecture Registry where the ecclesiastical entity is registered.

Indeed, every Prefecture / District Government Office maintains a Register of Legal Persons. This is where Ecclesiastical Entities (as well as foundations, associations, nonprofits, etc.) provide a public record of their existence. By completing this recording, a bona-fide adminsitrative procedure is launched, which will culminate in the entity’s status as a legal entity being recognised.

Among the facts that must be recorded with the Registrar is the name of the ecclesiastical entity’s legal representative, which therefore may be:

  • Identified upon the Entity’s initial enrollment (for any new ecclesiastical entity, under Art. 4, paragraph 1, Presidential Decree no. 361/2000).
  • Modified over the Entity’s lifecycle (where a previously formed Entity, already enrolled in the Register has, for whatever reason, appointed a new person to such position, pursuant to Art. 4, paragraph 2, Presidential Decree no. 361/2000).

Scope of Authority

Once the authority to represent the entity has been delegated, the legal representative may take any number of official steps, broken down into two major categories:

  • Ordinary course of business (e.g. maintenance of existing systems or utilities);
  • Special business (such as the sale of real estate).

The legal representative of the Ecclesiastical Entity may undoubtedly conduct routine business. Indeed, more intensive oversight on such operations might make managing the entity cumbersome.

Please note, moreover, that there is not a formal list of “ordinary business” items, since each institution must take steps to identify internal regulations to govern the use and administration of entity assets (see Canon 635, paragraph 2, CJC and Canon 1281, paragraph 2).

In terms of special-business items, on the other hand, such acts may only be carried out pursuant to authorisation by the canonical superior; failing that, the act shall be voidable.

Having thus circumscribed the authority of the legal representative, one can state that the canonical authorities would be responsible for authorising acts exceeding the scope of “ordinary business”. Because there is not a bright-line rule separating the two categories, the best practice for each Ecclesiastical Entity is to create bylaws in which such distinction is made.

Finally, should any particularly significant item of special business arise (e.g. the sale of real estate), authorisation from the Order or securing of a special permit from the Holy See shall be required.

Representation in Court

During the lifecycle of an Ecclesiastical Entity, disputes with third parties might arise which, due to a misunderstanding or other issue, are not amicably resolved in a manner that avoids litigation. In such cases, the legal representative shall be the Ecclesiastical Entity’s in-court representative, known as a “representative ad-litem”.

Moreover, the legal representative may be served legal documents directed to the Ecclesiastical Entity, may retain attorneys to represent the entity’s interests in court, and to enter into settlements to resolve disputes.

Naturally, such settlements exceed the scope of the “ordinary course of business” (as would, for example, an agreement in a court case involving a property dispute), subject to the limits on special business stated above, as well as the need for all related ecclesiastical authorisations/permits.

The Legal Representative’s Nationality for purposes of recognition – relationship with canonical law

Pursuant to Art. 7 of Law no. 222 (20/05/1985) n.222, “The Italian religious-institutions dioceses and societies of apostolic life cannot be recognised unless represented – whether de jure or de facto – by Italian citizens domiciled in Italy. This provision shall not apply to Generalates, and to the governance structure for the dioceses, and societies of apostolic life”.

Therefore, the legal representative for any Religious Entity enumerated under the law generally must be Italian unless the situation involves a Generalate, or the liaison office (Procura) of a religious institute or a society of apostolic life. In such cases, the legal representative may be a foreign national.

Finally, we would note that the legal representative for an ecclesiastical entity need not be the same person as the canonical superior. Indeed, in many cases it is the General Bursar who is appointed as legal representative.

Delegation of Authority for Especially Complex Religious Institutions

In order to better administer the Ecclesiastical Entity, and more specifically for especially complex ecclesiastical entities, the legal representative may subdelegate his/her authority. The legal representative might therefore, if they find they have more tasks than they can handle, delegate some of their duties to other natural persons. By the same token, any complex matter requiring specific expertise may likewise be outsourced.

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This is the first of a series of articles in which we will discuss the more salient points of representing Religious Entities. Write us at info@dikaios.international or ring us on +39 06 36712206 for questions or support.

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