Information on founding an association
In order to make the founding of your association a smooth process, we have drawn up a practical guide to founding an association, including how to draw up the minutes of the inaugural meeting and other useful legal information on this topic.
What is an association?
An association is a group of natural persons and/or legal entities that come together for the long term to pursue a certain, typically non-commercial purpose, such as political, religious, scientific, artistic, charitable, and social causes. However, an association may pursue an economic purpose if no commercial company is operated.
What is the difference to a foundation?
A foundation has no members, but is rather a legal entity that manages assets with a specific purpose.
How is an association founded?
At least two people must decide to do so and draw up written association bylaws. These must govern the purpose, funds, and organization of the association and also state the will to found the association. The association is founded only after the bylaws have been drawn up. An association has the capacity to act only after the governing bodies have been appointed. In other words, when the board of directors has been chosen. In general, an association does not need to be entered in the commercial register. However, it can be entered in order to increase its credibility, for example. If an association operates commercial business, then entry in the commercial register is required. More information on this topic can be found here.
How should the association be organized?
For the founding, the board of directors must at least be determined. An association also needs an annual general meeting and, in exceptional cases, an auditor as well (for more information, see this article).
Can I freely choose the name of the association?
Generally speaking, yes. However, the name must differentiate the association from other association names and may not be misleading. By the same token, existing trademark rights and other rights must be taken into account. The word “association” does not need to appear in the name. If the association goes bankrupt, the suffix “in liquidation” must be used.
Where should the association be domiciled?
The registered office can be freely chosen, but doesn’t have to be defined. In this case, the association has its registered office where the administration actually takes place. If no registered office address has been specified and the association should or must be entered in the commercial register, a domicile acceptance declaration must be drawn up. The declaration confirms that the association is granted a domicile at a specific address from the domicile owner. In other words, a c/o address may be used as the address for the association.
Who is held liable for the liabilities of the association?
Only the association’s assets. If no personal liability or obligation to furnish additional cover has been set out in the bylaws, then no member is liable for the liabilities of the association.
Who can be a member of an association?
Natural persons and legal entities (i.e. people and companies) can become members. The bylaws may define who has the right to be a member. Racist or discriminating criteria are not permitted.
What are all the exact steps to found an association?
- Determine the name and purpose of the association
- Draw up bylaws in writing
- Hold a founding meeting
- If necessary, enter the association in the commercial register
- Conclude obligaroty and appropriate insurance policies,
- Create website/corporate identity
Below, you will find detailed legal information, a comprehensive checklist for founding an association, and a template for a founding protocol.