Association

What is an association?

An association is an organisation whose main objective is not making a profit. Most associations focus on organising social activities, such as sports or neighbourhood associations. An association may make a profit, but it 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 (volledige rechtsbevoegdheid): has the same rights and duties as a member of the public. For example, it can buy property, take out loans, and receive an inheritance. Only associations with full legal capacity are eligible for subsidies.
• Association with limited legal capacity (beperkte rechtsbevoegdheid): both the association and the members are privately liable. You do not need a civil-law notary to set up an association with limited legal capacity.

Setting up an association with full legal capacity

You do not need a minimum start-up capital for an association. 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). 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 costs for a civil-law notary vary between €400 and €800. All committee members must be registered in the Business Register. You remain personally liable until you have done this.

You must hold a general meeting of members at least once a year. This general meeting is where final decisions are made and where financial statements are approved. From 1 January 2025, you will be allowed to organise a fully digital general meeting. This is in addition to the already existing option of a partially digital (hybrid) meeting.

UBO register: report your UBOs

Most businesses that register in the Business Register must include their ultimate beneficial owner(s) or UBOs in the UBO register. UBOs are people who have direct or decisive influence on the association. For more information, see the article What are UBOs? An association with limited legal capacity does not have to register UBOs.

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 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.

Administration

You are legally required to keep records. An association that also carries out commercial activities must file financial statements (jaarrekening) if the turnover is above a certain amount. The information you have to submit depends on the size of your company. The average annual administration costs range from €600 to €1,800.

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

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.

Inform KVK about any committee member changes within 8 days. Failure to do so may mean that former committee members could be held liable if they're 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.

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.

Homeowners' association

It is mandatory for all apartment owners in the Netherlands to be a member of a homeowners' 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.