An association is a legal entity with members. We distinguish two types of associations: the association with full legal capacity and the association with limited legal capacity. An association with full legal capacity is an association whose articles of association are included in a notarial deed. If the articles of association are not included in a notarial deed, we speak of an informal association, which has limited legal capacity.
There is also the owners' association that arises in the case of a division into flat rights. This is a special association with largely different rules.
Organisation
An association has a board and a general meeting (ALV). The board manages the association. It manages the association and represents the association externally.
The general assembly is formed by the members of the association. Each member has at least one vote in the general assembly.
In associations with very many members, a graduated system is sometimes used. In that case, the general assembly is formed by a members' council. This council then consists of delegates elected by the members. They exercise the voting right in the general assembly on behalf of the members. The general assembly has the power to take important decisions. In principle, it appoints and dismisses the board, is authorised to amend the articles of association and must approve the financial documents drawn up by the board.
Besides the board and the general assembly, an association may also have other bodies. These include, for example, a supervisory board that supervises the board.
Establishment of an association
An association must be founded by at least two persons. The articles of association of an association with full legal capacity must be laid down in a notarial deed. In addition, the association must be registered in the commercial register of the Chamber of Commerce.
No specific requirements apply to the incorporation of an informal association, i.e. an association with limited legal capacity. Although it is desirable to put the articles of association in writing, this is not a requirement. In addition, it is desirable to register this association in the trade register of the Chamber of Commerce.
Directors' liability
The directors of an association with full legal capacity are not liable for the obligations of the association. This may be different if they have behaved improperly as directors. Directors of an association with limited legal capacity, in addition to the association, can be held liable for the obligations of the association.
Taxes
An association can, like, for example, a private limited company, run a company. If the association runs an enterprise, it pays corporate income tax on the profits made from that enterprise.
For more information on setting up an association and preparing articles of association, please contact us. We will be happy to advise you.
