The association

What is an association?

An association is an organisation with members who want to achieve a goal together. Most associations focus on organising social activities, such as sports or neighbourhood associations. Making a profit is not an association's goal but it may do so. The condition is that any profit must be reinvested into the association. You are not allowed to divide any profits amongst members.

The association has at least 2 members. The meeting of members (ledenvergadering) has full power and authority. This means that the members take decisions over the association at the meeting. Each member is entitled to a vote. The ledenvergadering appoints the Committee, which consists of (at least) a chair, secretary and treasurer.

An association has no shareholders. All money is collected through contributions by members, such as donations and fundraising activities.

Types of associations

There are essentially 2 types of associations in the Netherlands:

Association with full legal capacity

An association with full legal capacity (volledige rechtsbevoegdheid) is a legal entity. This means, for example, it can buy property, take out loans, and receive an inheritance. Directors and committee members are not liable privately, except in case of mismanagement. Do you want your association to receive subsidies? Then you often need to be an association with full legal capacity. You set the association up with a civil-law notary.

Association with limited legal capacity (informal association)

You do not need a civil-law notary to set up an association with limited legal capacity (beperkte rechtsbevoegdheid). If you do not register this type of association in the Business Register, the directors are liable privately. If you do register an informal association, then both the association and the directors are liable.

Setting up an association with full legal capacity

To set up an association with full legal capacity you will need a civil-law notary to draft a deed of formation, stating that you have created a vereniging and listing its articles of association (statuten).

Registering with KVK

The notary will then usually arrange to register your association in the Business Register (Handelsregister) at KVK. You pay a one-time fee to register with KVK.

The notary also registers all directors or committee members. Please note: as long as the association is not registered in the Business Register, you remain personally liable.

On incorporation, the notary also registers the ultimate beneficial owners (UBOs) of your association in KVK's UBO register. UBOs are, for example, persons who have direct or decisive influence on the association.

Setting up an association with limited legal capacity

You do not need a civil-law notary to set up an association with limited legal capacity. Nor do you have to register the informal association in the Business Register. You can, however, limit the liability of members by registering in the Business Register. None of the members are then liable with their private assets for possible debts. That is, unless creditors can prove that the association does not fulfill its obligations. An association with limited legal capacity does not have to register UBOs.

Administration

You are legally required to keep records. Does your association carry out commercial activities and have an annual turnover of at least €6 million for 2 consecutive years? Then you must file financial statements (jaarrekening) with KVK . The information you have to submit depends on the size of your company.

Taxes

An association without commercial activities does not pay tax. An association operating as a business usually pays corporate income tax (vennootschapsbelasting, VPB). You can make use of tax deductions, such as the investment allowance. Any profits must be allocated to the association's objective or purpose. Not all associations have to pay VPB. Read which associations are exempt.

Whether an association has to pay and charge VAT or not, depends on its specific situation (in Dutch).

Liability for debts

An association with full legal capacity has a legal personality. This means that its committee members are usually not liable for any debts. There are exceptions to this rule. For example, mismanagement, negligence, or failure to register the association in the Business Register. Read more about the liability of committee members.

Please note: you must inform KVK about any committee member changes within 8 days. Former committee members could be held liable if they are still listed in the Business Register.

Liability for association with limited legal capacity

If your association has limited legal capacity, then you as a member are personally liable with your private assets. You can limit the liability by registering the association in the Business Register.

Signing authority

The committee as a whole is authorised to sign. This means that members may either jointly or individually sign contracts or perform certain legal acts on behalf of the association. Who may sign alone and who must sign with one or more other members is set out in the articles of association.

Power of attorney

The committee can also choose to appoint power of attorney to someone else. This person is then authorised to act on behalf of the association. It can be useful to register this person in the Business Register. This way your business partners also know who is allowed to act on behalf of the company.

Personnel

Associations can employ staff. You then have to pay payroll taxes and social contributions for your personnel. If you are hiring an employee for the first time, you must register as an employer with the Tax Administration. You must also report this to KVK. Read the checklist Employing staff in the Netherlands for more information.

The general meeting of members usually has authority over the committee members. When a member carries out work for the association and is paid for it, they are employed by the association. The compensation must be in proportion to the work.

Associations with an ANBI status are not allowed to employ committee members. Usually, the members only receive an amount to cover costs incurred.

Social security and national insurance contributions

Members employed by the association are covered by any employee insurance schemes. If you are not employed, you can take out voluntary insurance. You can also build up a pension yourself.

Ending an association

If you want to end your association, a general meeting of members must first decide to dissolve the legal entity. A dissolved legal entity does not immediately cease to exist. The legal entity is only terminated when all debts and payouts have been paid. Do assets remain? You have determined in the articles of association where that money goes.

Read more about dissolving a legal entity.

Owners' association

It is mandatory for all apartment owners in the Netherlands to be a member of an owners' association, or in Dutch a vereniging van eigenaars (VVE). VVEs represent the shared interests of apartment owners in matters such as building maintenance and servicing.

The VVE has several obligations. It must hold a meeting of its members at least once per year, maintain a reserve fund, and issue an annual financial statement. VVEs must be registered in the KVK Business Register.

Read more about the owners' association.