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Constitution

ARTICLES OF ASSOCIATION OF NORTH ESTONIA MEDICAL CENTRE FOUNDATION

The articles of association of the North Estonia Medical Centre Foundation (hereinafter “the Foundation”) have been approved by the foundation resolution on 25 July, 2001.

 

Chapter 1

GENERAL PROVISIONS

 1. The name of the Foundation shall be North Estonia Medical Centre.

2. The Foundation shall be located in Tallinn, the Republic of Estonia.

3. The Foundation shall be a legal person in private law whose activities shall be governed by the laws and other legislation of the Republic of Estonia and these articles of association.

4. The Foundation has been founded for an unspecified term.

5. The Foundation shall have no beneficiaries.

6. The documents of the Foundation shall indicate the name, official address and registry code of the Foundation.

7. The financial year of the Foundation shall begin on 1 January and end on 31 December.

8. The bodies of the Foundation shall be the supervisory board and the management board.

 Chapter 2

PURPOSE OF FOUNDATION

 9. The purpose of the Foundation shall be to provide high quality specialised medical care and emergency medical care, to be a training base for health care professionals prior to the acquisition of the respective qualification and thereafter, and to conduct studies and research pertaining to health care through the administration and use of its property.

10. In order to achieve its purpose the Foundation shall:

1) provide outpatient and inpatient specialised and emergency medical care;

2) provide other services, if the provision thereof is not contrary to the law;

3) be the training base for health care professionals prior to the acquisition of the respective qualification and thereafter and also carry out training events pertaining to health care;

4) if necessary, carry out expert analyses;

5) develop, improve and approve new diagnosis and treatment methods;

6) approve new medicines and medical equipment;

7) conduct and participate in health studies and perform methodical work related to health care;

8) cooperate with other providers of health care services, professional associations and other institutions engaged in health care;

9) ensure that the services provided are of good quality and comply with the requirements established by the legislation;

10) perform other duties which are imposed on it by law or which are necessary to achieve the purpose of the Foundation.

 Chapter 3

SUPERVISORY BOARD OF FOUNDATION

 Part 1

Competence of Supervisory Board

11. The supervisory board shall be the body of the Foundation which plans the activities of the Foundation, organises the management of the Foundation and supervises the activities of the Foundation.

12. The supervisory board shall:

1) upon the proposal of the management board, approve the 3-year development plan of the Foundation;

2) approve the administrative structure of the Foundation;

3) upon the proposal of the management board, approve the annual budget and activity plan of the Foundation;

4) appoint and recall the members of the management board;

5) determine the terms and conditions of contracts of service to be entered into with the members of the management board;

6) upon the proposal of a member of the management board, decide on the imposition of the obligations of the member of the management board on a third party;

7) represent the Foundation in disputes and conclusion of transactions with a member of the management board, as well as with the persons whose representative or representative body’s member is a member of the management board of the Foundation;

8) if necessary, request that the management board give information on the activities and economic situation of the Foundation, prepare a management report or a balance sheet;

9) upon the proposal of the management board, approve annual accounts and management report within at least 4 months as of the end of the financial year;

10) if necessary, examine the documents of the Foundation, check the accuracy of accounting, existence of property, as well as compliance of the activities of the Foundation with the law and articles of association;

11) determine the number of auditors of the Foundation, appoint the auditor and determine the terms and conditions of the contract to be entered into with the auditor;

12) approve the rules and regulations for the supervisory board;

13) propose to the founder that amendments be made to the articles of association of the Foundation;

14) decide on the merger and division of the Foundation;

15) perform other duties imposed on it by law and these articles of association.

13. The consent of the supervisory board shall be required for the management board to enter into transactions which are beyond the scope of everyday economic activities, particular to enter into transactions which result in:

1) acquisition or termination of participation in limited liability companies;

2) transfer or encumbrance with a real right of immovables and registered movables;

3) taking of a loan, if the amount of the loan exceeds 5% of the previous year’s turnover of the Foundation;

4) granting of a loan or securing a debt obligation.

 Part 2

Members of Supervisory Board

14. The supervisory board shall consist of 4-7 members. A member of the supervisory board shall be appointed and recalled and the amount of their remuneration determined by the Minister of Social Affairs. Upon determining the amount of the remuneration of the supervisory board’s member the applicable legislation shall be followed.

15. A member of the supervisory board shall be a natural person with active legal capacity. A member of the management board, an auditor, a person with equivalent economic interests, a bankrupt or an employee of the Foundation may not be a member of the supervisory board.

16. The term of office of a member of the supervisory board shall be 3 years and it shall start as of entry into force of the resolution appointing them to office.

17. The powers of a member of the supervisory board shall terminate upon expiry of the term of office or premature recall of the member, their resignation or in case the participation of the member of the supervisory board in the activities of the supervisory board becomes impossible for objective reasons (death or them becoming a missing person).

18. A member of the supervisory board shall be recalled by a written notice of the Minister of Social Affairs.

19. A member of the supervisory board may resign at their own initiative, if they inform the supervisory board thereof in writing at least 1 month in advance.

20. The powers of a member of the supervisory board shall terminate:

1) upon the lapse of 3 years from entry into force of the resolution appointing the person to the office of a member of the supervisory board;

2) when recalled, upon entry into force of the resolution recalling the member;

3) upon resignation, after 1 month as of the day the supervisory board received the written resignation notice of the member of the supervisory board;

4) as of the day the participation of the person in the activities of the supervisory board became impossible for objective reasons.

21. Upon termination of the authorities of a member of the supervisory board due to the expiry of the term of office, recall or resignation the Minister of Social Affairs shall appoint a new member of the supervisory board to office at least by the day the term of office of the previous member of the supervisory board expires. If the powers of a member of the supervisory board terminate due to the fact that the participation of the person in the activities of the supervisory board became impossible for objective reasons, the Minister of Social Affairs shall immediately appoint a new member of the supervisory board. The Minister of Social Affairs shall not be obliged to appoint a new member of the supervisory board, if after termination of the powers of a member of the supervisory board the requirement regarding the number of supervisory board members mentioned in article 14 hereof is complied with.

22. A member of the supervisory board may be appointed or recalled by court at the request of an interested party or at the court’s own initiative, if a member of the supervisory board has not been appointed to office during the term specified in the articles of association, or has not been recalled in the circumstances prescribed in the articles of association.

 Part 3

Chairman of Supervisory Board

 23. The members of the supervisory board shall elect a chairman from among themselves who shall organise the activities of the supervisory board.

24. All the members of the supervisory board shall participate in the election of the chairman of the supervisory board. Upon insufficient representation the next meeting convened for the election of the chairman of the supervisory board shall have a quorum if at least 2/3 of the members of the supervisory board are present.

25. Upon absence of the chairman of the supervisory board a person appointed by the chairman shall serve as a substitute for the chairman. If the chairman of the supervisory board has not appointed a substitute, the eldest member of the supervisory board shall serve as the substitute for the chairman.

26. The powers of the chairman of the supervisory board shall be valid until their recall, resignation from the position of chairman or resignation from the supervisory board.

27. The chairman of the supervisory board shall:

1) call the meeting of the supervisory board, determine the time, place and agenda of the meeting;

2) organise the adoption of resolutions without calling a meeting and inform of the resolutions adopted in such a manner;

3) chair the meetings of the supervisory board and propose the adoption of resolutions in matters within the competence of the supervisory board;

4) decide on the persons to be invited to the meetings of the supervisory board besides the members of the supervisory board and the chairman of the management board;

5) appoint the recording secretary of the meeting of the supervisory board;

6) on the basis of the resolution of the supervisory board, enter into contracts of service with the members of the management board on behalf and in the name of the Foundation;

7) communicate with the public and deliver opinions in the name of the supervisory board;

8) represent the Foundation in other cases prescribed by law and these articles of association.

 Part 4

Meeting of Supervisory Board

 28. The meetings of the supervisory board shall be ordinary and extraordinary. Ordinary meetings shall be held when necessary, but at least four times a year. An extraordinary meeting shall be called, if a member of the supervisory board, the management board or an auditor demands this.

29. A meeting of the supervisory board shall be called by the chairman of the supervisory board who shall inform the members of the supervisory board of the meeting in writing by post, fax or e-mail. The members of the supervisory board shall be informed of the calling of an ordinary meeting at least 14 days in advance. The members of the supervisory board shall be informed of the calling of an extraordinary meeting at least 1 day in advance.

30. The notice calling the meeting of the supervisory board shall indicate:

1) the time and place of the meeting;

2) the agenda of the meeting;

3) other information and circumstances required by the rules and regulations of the supervisory board.

31. A meeting of the supervisory board shall have a quorum, if more than half of the members of the supervisory board are present, unless the law or these articles of association prescribe a greater representation requirement.

32. If upon calling a meeting of the supervisory board the requirements of law or the articles of association have been violated, the supervisory board shall not be entitled to adopt resolutions, unless all the members of the supervisory board are present at the meeting.

33. The chairman of the supervisory board shall decide on the persons to be invited to the meetings of the supervisory board besides the members of the supervisory board.

34. Minutes shall be taken of the meetings of the supervisory board. A person appointed by the chairman of the supervisory board shall take the minutes of the meeting. The minutes shall be signed by all the members of the supervisory board present at the meeting and the recording secretary.

 Part 5

Resolution of Supervisory Board

 35. The supervisory board shall adopt resolutions at a meeting of the supervisory board. Each member of the supervisory board shall have one vote. A member of the supervisory board shall not be entitled to refuse to vote or remain undecided. The votes shall be open.

36. A resolution of the supervisory board shall be adopted, if more than half of the members of the supervisory board present at the meeting vote in favour of the resolution. In order to adopt the resolutions mentioned in subsection 15 of section 12 and in section 13 of these articles of association, it shall be necessary that 2/3 (two-thirds) of the members of the supervisory board present vote in favour of the resolutions.

37. The supervisory board may adopt resolutions without calling a meeting. In order to adopt a resolution without calling a meeting the chairman of the supervisory board shall send a draft resolution to the members of the supervisory board and determine a term for written reply, which may not be shorter than 7 days and longer than 14 days. The sender shall attach an explanation regarding the draft and reasons why it is practical to adopt the resolution without calling a meeting to the draft resolution.

38. The resolution made without calling a meeting shall be adopted, if all the members of the supervisory board vote in favour of the resolution. The members of the supervisory board, who do not send a written reply by the deadline, shall be considered to have voted against the draft resolution. The chairman of the supervisory board shall inform the members of the supervisory board of the resolutions put to a vote along with the content and voting results thereof at the first meeting of the supervisory board following the deadline for written reply.

 Chapter 4

 MANAGEMENT BOARD OF FOUNDATION

 Part 1

 Competence of Management Board

39. The management board of the Foundation shall manage and represent the Foundation according to the lawful orders of the supervisory board.

40. The management board shall:

1) at the end of each year prepare a 3-year development plan of the Foundation and propose to the supervisory board that this be approved;

2) make proposals to the supervisory board as to the administrative structure of the Foundation;

3) approve the statutes of the structural units of the Foundation;

4) prepare the annual budget and activity plan of the Foundation and submit these to the supervisory board for approval;

5) approve the annual budget of the structural units of the Foundation;

6) adhere to the lawful orders of the supervisory board upon managing the Foundation;

7) enter on behalf of the Foundation into contracts and ask for the supervisory board’s approval for the conclusion of the transactions in cases mentioned in clause 13;

8) represent the Foundation as an employer in disputes with third parties;

9) present the supervisory board with an overview of the activities and economic situation of the Foundation within the month immediately following a calendar quarter, and immediately inform of the significant deterioration of the economic situation of the Foundation and other important circumstances related to the activities of the Foundation, and give the supervisory board necessary information on the management of the Foundation;

10) submit an application for changing the information entered in the register regarding the Foundation;

11) approve the internal work procedure rules, operations procedure, and accounting policies and procedures of the Foundation and the structural units thereof;

12) organise the accounting of the Foundation;

13) monitor the execution of the budgets and adherence to the plan for distribution of expenditure of the Foundation and its structural units;

14) prepare and sign the annual report and management report of the Foundation, submit these to the auditor for audit and thereafter at least within four months as of the end of the financial year to the supervisory board for approval, and after approval of the reports by the supervisory board and at least within six months as of the end of the financial year submit these to the register;

15) if necessary, request that a meeting of the supervisory board be called;

16) establish the criteria for selecting employees, and rules for their remuneration;

17) if necessary, form committees and determine the size, composition and duties thereof;

18) approve the rules and regulations of the management board;

19) perform other duties which are necessary to achieve the purpose of the Foundation or which have been imposed on it by law, these articles of association or a resolution of the supervisory board.

41. The chairman of the management board shall be entitled to represent the Foundation in all legal acts alone and other members of the management board all together. Upon the proposal of a member of the management board the supervisory board may impose the obligations of the member of the management board on a third party.

42. A member of the management board shall not be entitled to conclude a transaction with themselves or with a person whose representative or a representative body’s member they are, or a transaction which would give reason to suspect them in relations involving the risk of corruption.

 Part 2

 Members of Management Board

 43. The management board shall consist of 1-5 members. A member of the management board shall be appointed and recalled and a contract of service with the member of the management board entered into by the supervisory board.

44. A member of the management board shall be a natural person with active legal capacity and higher education. At least half of the members of the management board must reside in Estonia. A member of the supervisory board, an auditor or a bankrupt may not be a member of the management board.

45. The term of office of a member of the management board shall be 5 years and it shall start as of entry into force of the resolution appointing them to office.

46. The powers of a member of the management board shall terminate upon expiry of the term of office or premature recall of the member, their resignation, or if the participation of the member of the management board in the activities of the management board becomes impossible for objective reasons (death or them becoming a missing person).

47. The supervisory board shall recall a member of the management board with a written notice only upon good reason. In particular, the following shall be considered good reasons:

1) conflict of interest;

2) acts or omissions of the member of the management board damaging the Foundation;

3) incapacity to participate in the activities of the management board;

4) initiation of bankruptcy proceedings against the member of the management board;

5) significant damage to the interests of the Foundation in any other manner.

48. A member of the management board may resign at their own initiative, if they inform the supervisory board thereof in writing at least 1 month in advance.

49. The powers of a member of the management board shall terminate:

1) upon the lapse of 5 years from entry into force of the resolution appointing the person to the office of a member of the management board;

2) when recalled, upon entry into force of the resolution recalling the member;

3) upon resignation, after 1 month as of the day the supervisory board received the written resignation notice of the member of the management board;

4) as of the day the participation of the person in the activities of the management board became impossible for objective reasons.

50. Upon termination of the powers of a member of the management board due to the expiry of the term of office, recall or resignation the supervisory board shall appoint a new member of the management board to office at least by the day the term of office of the previous member of the management board expires. If the powers of a member of the management board terminate due to the fact that the participation of the person in the activities of the management board became impossible for objective reasons, the supervisory board shall appoint a new member of the management board within a reasonable term but at least within 1 month as of the day mentioned in sub-article 4 of article 55. The supervisory board shall not be obliged to appoint a new member of the management board, if even after the termination of the powers of a member of the management board the requirement regarding the number of management board members mentioned in article 43 hereof is complied with.

 Part 3

Chairman of Management Board

51. The members of the management board shall elect a chairman from among themselves who shall organise the activities of the management board.

52. All the members of the management board shall participate in the election of the chairman of the management board.

53. Upon absence of the chairman of the management board a person appointed by the chairman shall serve as a substitute for the chairman. If the chairman of the management board has not appointed a substitute, the eldest member of the management board shall serve as the substitute for the chairman. If the chairman of the management board has not been elected from among the members of the management board, the eldest member of the management board shall perform the duties of the chairman.

54. The powers of the chairman of the management board shall be valid until the expiry of the term of the powers, their recall by the supervisory board or resignation from the management board or from the position of chairman.

55. The chairman of the management board shall:

1) determine the areas of activity and responsibility of the members of the management board;

2) call the meetings of the management board; determine the place of the meeting and issues to be discussed at the meeting;

3) appoint the recording secretary of the meeting of the management board and sign the minutes of the meeting of the management board;

4) propose to the supervisory board that a member of the management board be appointed or recalled;

5) propose to the supervisory board that contracts of service be entered into with the members of the management board;

6) give the supervisory board their opinion on establishment of the remuneration of the chairman and the members of the management board and monthly limit of expenses to be compensated for;

7) participate in the meetings of the supervisory board;

8) communicate with the public and third parties and deliver opinions in the name of the management board and the Foundation.

 Part 4

Meeting and Resolution of Management Board

 56. The management board shall adopt resolutions at a meeting of the management board. The meetings of the management board shall be ordinary and extraordinary. Ordinary meetings shall be held at least once a month. Extraordinary meetings shall be held when necessary or when demanded by the supervisory board or at least two members of the management board.

57. The members of the management board shall be informed of the ordinary meeting in writing or by e-mail at least 24 hours in advance. The members of the management board shall be informed of an extraordinary meeting in writing, by e-mail or by phone at least 2 hours in advance. An extraordinary meeting may be held by the members of the management board via means of distance communication.

58. A meeting of the management board shall have a quorum if all the members of the management board have been called as required and more than half of the members of the management board are present. A resolution shall be adopted if over one-half of the members of the management board with the right to vote are in favour. The votes shall be open.

59. Minutes shall be taken of the meeting of the management board by a person appointed by the chairman of the management board. The minutes shall be signed by the chairman of the management board and the recording secretary.

 Chapter 5

ADMINISTRATIVE STRUCTURE OF FOUNDATION

60. The structural units of the Foundation shall be clinics and divisions and the departments to be formed within the composition thereof. Other structural units may be formed by the resolution of the supervisory board.

61. The statutes of the structural units of the Foundation shall be approved by the management board. The statutes of structural units shall set out the bases for the management and administration and financing procedure thereof, as well as other matters which need to be regulated under the statutes of structural units.

Chapter 6

PROPERTY AND AUDITOR OF FOUNDATION

62. The following shall form the property of the Foundation:

1) property transferred to the Foundation under the foundation resolution;

2) proceeds from the sale of health care services and services related to health care;

3) proceeds received by the Foundation from the performance of other contracts or in any other manner due to their activities;

4) allocations from state and local governments’ budgets intended for a specific purpose;

5) donations, grants and other proceeds from third parties;

6) other proceeds.

63. The property of the Foundation shall only be used for achieving the Foundation's purpose. The property of the Foundation shall be possessed, used and disposed of by the management board according to the procedure prescribed by the law and these articles of association considering the restrictions arising from the resolutions of the supervisory board, these articles of association and the law.

64. Property transferred to the Foundation shall be accepted by the management board by an instrument of delivery and receipt which shall indicate information on the transferor and the receiver, time of transfer, composition and value of the property and, upon transfer of real estate, also information on the accessories, condition, manner of use and deficiencies of the property, and the need for a notation to be entered in the land register.

65. The management board shall appraise the value of non-monetary means, perform operations necessary to transfer the property to the ownership of the Foundation, and prepare necessary documents. Monetary funds to be transferred to the Foundation shall be transferred to the bank account of the Foundation. The Foundation shall not accept property which is not in compliance with legislation, good morals or the purpose of the Foundation.

66. A contract shall be entered into with a transferor of the property transferred to the Foundation for a specific purpose, if the transferor so desires; the contract shall set out lawful requirements of the transferor regarding the manner of use and purpose of the property. A report on the use of the property shall be presented to the transferor of property, if the latter so demands.

67. The auditor of the Foundation shall be appointed and recalled by the supervisory board of the Foundation. The Foundation may have several auditors. In order to appoint an auditor the consent of the auditor shall be necessary. The contract to be entered into with the auditor shall set out the grounds for recall of the auditor, exact term of the auditor’s powers and remuneration. An auditor may be appointed for a single audit or for a term of 3 years.

Chapter 7

AMENDMENTS TO ARTICLES OF ASSOCIATION

68. The articles of association may be amended by the founder or, in cases prescribed by law, by a court. The supervisory board may propose that amendments be made to the articles of association.

69. The articles of association may only be amended in order to take into account the changed circumstances, and considering the purpose of the Foundation. The purpose of the Foundation and this chapter of the articles of association may not be amended.

Chapter 8

MERGER, DIVISION AND DISSOLUTION

70. The merger and division of the Foundation shall be decided by the supervisory board of the Foundation. The dissolution of the Foundation shall be decided by the founder.

71. The Foundation may merge with another foundation, if the purposes of both of them are similar and the merger is also permitted under the other foundation’s articles of association.

72. The merger of the Foundation shall only be permitted, if it is necessary to better achieve the purpose of the Foundation.

73. The use of the name of the Foundation – North Estonia Medical Centre– shall be decided under separate agreement to be entered into upon division or merger.

74. The Foundation shall be dissolved according to the procedure set out by law. The founder may decide to dissolve the Foundation if the purpose of the Foundation has been achieved or the achievement of the purpose has become impossible.

75. The property remaining after satisfying all the claims of creditors upon dissolution of the Foundation shall be transferred to the Republic of Estonia who shall use the property in accordance with the purposes of the Foundation as much as possible.