Association/Foundation

Anyone who wants to achieve a goal together with others can opt for an association or a foundation. Both are legal entities, but they differ clearly in set-up, control and purpose.

An association is a legal entity with members. These members jointly determine the association's policy. The articles of association are laid down in a notarial deed. If this is not the case, it is an informal association with limited legal capacity.

There is also a special form: the Owners' Association (VvE). It arises automatically when a building is divided into apartment rights and is subject to partly different rules.

An association has at least:

• a board, which is responsible for day-to-day management and represents the association;
• a general meeting of members, in which the members take decisions together.

In the general meeting, each member has at least one vote. The general meeting takes important decisions, such as:

• appointing and dismissing board members;
• amending the articles of association;
• approving the financial documents.

Some associations also have a supervisory board that oversees the board.

An association is established by at least two persons. The articles of association are laid down in a notarial deed, and the association must be registered in the trade register of the Chamber of Commerce and in the UBO register.

Board members are in principle not personally liable, unless there is mismanagement. In that case, personal liability may arise.

When an association runs a business, it is liable to pay corporate income tax on the profit it makes.

A foundation is a legal entity without members or shareholders. It always has an idealistic or social purpose. Distributions may only be made in line with that purpose and never to the founders or board members themselves, except as remuneration for work or costs.

A foundation has at least one board member. In addition, there may be a supervisory board that oversees the board.

A foundation is established by notarial deed, which also contains the articles of association. There is considerable freedom in structuring the organisation and its purpose.

Board members are in principle not personally liable, unless there is mismanagement.
Some foundations can obtain the status of:

• ANBI (public benefit organisation)
• SBBI (social interest organisation)

This can result in tax benefits, particularly in the area of gift tax and inheritance tax.