The Dutch association, although less well-known, is an important factor to consider when establishing an NGO or a “membership” organisation. The association is a legal company that, as its name suggests, brings together many persons in a certain situation. The association is a legally recognised organisation with members who are committed to a certain objective (such as “making music” or “protecting the local nature”). The law does not consider the association formed as a cooperative to be an association.
For an association to be established with full legal capacity, a notarial deed is necessary. Additionally, it is required to register with the Chamber of Commerce’s Trade Register.
The founding deed declares that you create the association and establish the statutes. These are the association’s “game rules.” The deed must be written in Dutch (or Frisian in Friesland), and the notary must ensure that all requirements are met. A minimum of two people are required to form an association.
Chamber Of Commerce Registration
Every association with full legal capacity is required to register in the Chamber of Commerce’s Trade Register. This is usually handled by the notary. The directors of the Dutch association are personally liable for legal acts performed on behalf of the association if they do not register.
Personal information about the founders and directors is included in the Trade Register. A notarial copy of the articles of association must also be deposited at the Chamber of Commerce for inspection. The information in the Trade Register is open to the public.
The registration in the Trade Register must be current. A change in the board of directors must be reported to the Chamber of Commerce by the board member as the notary does not do this automatically.
When setting up a Dutch association, this is the most important choice: choose an association with full legal or limited legal capacity. Consider the following key distinctions:
|Full Legal Capacity||Limited Legal Capacity|
|Association management is not liable in private||Association board liable as private individuals (for any claims towards the association)|
|Association may receive all legacies, including real estate||Association may receive legacies, but not from real estate|
|Association may receive heritages, gifts and subsidies||Association may not receive inheritances, gifts and subsidies|
|Association may buy and own real estate||Association cannot become the owner of real estate|
|Notarial deed required||May with private deed|
An association is also referred to as an “informal association” if it hasn’t been formalised by a notarial deed. Action committees frequently employ informal associations, which must at least adhere to the following criteria:
- There must be a membership;
- It is an organisation that has been established for a specific purpose;
- A board and regular member meetings are mandatory;
- The organisation must participate in legal transactions as a unit. This means that members may not conduct separate proceedings for the same purpose as the association.
An association is not a legal person if it does not adhere to these conditions. Then, it is impossible to file a lawsuit or challenge a provincial or municipal decision.
The statutes frequently contain the board’s responsibilities and authority. Making agreements regarding who can represent the group and for what, as well as who will oversee the bank account, is crucial. The members’ meeting has the most authority because it appoints the board. Effective laws stop people from misusing their authority. Are some things missing from the articles of association? The law then takes effect.
In any event, the following issues are covered by the laws:
- The name of the association and the municipality in which it is established;
- The purpose of the association;
- The obligations of the members towards the association, or the way in which these obligations can be imposed. Consider the contribution.
- The method of convening the general meeting;
- The method of appointment and dismissal of directors;
- The destination for the money that remains after the dissolution of the association or the way in which that destination must be determined.
Think carefully about the voting rights during the general meeting. Are there no restrictions in the articles of association? Youth members may, then, for instance, vote or run for office.
In addition to the articles of association, the general members’ meeting frequently creates one or more regulations. For instance, guidelines for applying for membership, behaviour standards, the way donations are paid, how the board makes decisions and how to use the clubhouse. Regulations cannot limit or increase the authority of board members beyond what is specified in the articles of association. Any regulation that conflicts with the articles of association is not binding. Regulations do not have to be recorded in a notarial deed.
Typically, an association’s primary source of funding comes from member donations. Consider how much of a contribution is necessary to achieve the association’s goal in advance. Do you, for instance, offer discounts to seniors or children? Other possible sources of income e are donations and legacies. When a group is recognised as an institution representing social interest (SBBI), there is no tax due upon donations and inheritances. The municipality determines if a group qualifies for a subsidy.
If you wish to discuss setting up a Dutch association further, do not hesitate to reach out to us.