Not-for-Profit Association

A Not-for-Profit Association is association of at least two natural and/or legal persons who pursue a not-for-profit purpose.

Article 1:2 of the Companies and Associations Code defines the ASBL, or non-profit association, as follows:

“An association is formed by an agreement between two or more persons, called members. It pursues a disinterested aim in the context of the exercise of one or more specific activities which constitute its object. It may not distribute or procure directly or indirectly any pecuniary advantage to its founders, members, directors or any other person except for the disinterested purpose determined by the statutes. Any transaction violating this prohibition is null and void”.

It is distinguished from companies by the prohibition on distributing the profits of its activities to its members. The ASBL may not provide any direct or indirect financial benefit to its members.

Details

Legal Personality

Yes

Assets/Share Capital

An ASBL has no share capital.

It owns assets and liabilities which are distinct from the members’ assets and liabilities.

Profit Distribution

Members of a not-for-profit are not allowed to receive profits. All profits must be reinvested in the association’s purpose.

Duration

Not-for-Profit associations are mostly incorporated for an indefinite period.

However, the Code allows for the incorporation of a limited duration association. This can be useful when the association is put in place for the purpose of completing a specific project.

Incorporation Requirement

Deed

Choice between a notarial deed or private agreement

Formalities

in case of a private agreement, two copies are required.

In both cases, it contains

the identification of the founding members and their desire to form the association on a specific date;
the statutes ;
the transitional provisions, i.e. the first decisions taken by the bodies of the association which enable it to function (e.g. the appointment of the first administrators, the delegation of certain tasks to a delegate for daily management, etc.);
the signature of all founding members.

An extract of the incorporation deed is filed with the registrar of the company’s court for publication in the Belgian Gazette.

Seed Funding

The law does not impose funding of the association. However, the statutes of the associations may create separate categories of memberships, and modulate voting rights based on the funding made by each member.

Minimum number of shareholders

The association must be founded by at least two members.

Financial Plan

None. However, not-for-profit associations are bound to fulfill a certain number of accounting formalities, the nature of which depends on the size of the association.

Securities

Types

There are no securities.

There are two types of members :

The full members (or effective members). They are part of the general assembly. The statutes describe the conditions for joining or leaving as a working member. Effective members have voting rights at the general assembly. They decide autonomously according to the powers given to them by law or the articles of association. The non-profit association maintains a register of members at its registered office listing the working members. This register can be in the form of an excel or word document.
Affiliated members (or associate or adherent members): they participate in the activities of the asbl or use its facilities, possibly after paying membership fees. Affiliated members have no voting rights at the general assembly. The asbl lists the rights and duties of joined members in its statutes.

More information on members

Voting Rights

Voting rights are traditionnally attributed to full members of the association. Affiliated members, if any, usually do not enjoy voting rights, except if it is so provided in the statutes of the association.

Transfers

Transferring the control on an ASBL occurs via a change of members. Exiting members resign and, prior to doing so, accent the application of other members.

Transfer the control on a ASBL does not consist in transferring shares, contrary to what is applicable for a company.

Liability

Shareholders

Members of an ASBL are not personally liable for the acts and obligations contracted by association.

However, before the association acquires legal personality, founding members are personally liable for all debts and obligations contracted by the forming association.

They are furthermore liable if acts taken by the association do not mention the legally required information, such as the association’s address, the mention “ASBL” or “VZW” next to the association’s name.

Directors

Directors can be held liable by the association for the execution of their mandate, for prejudice caused to the association or to third parties. Directors must exercise their powers with necessary caution and with respect to the law and the statutes.

Decision Making

General Meeting

For an overview of the competences of General meeting, click here

Board

The Administration Body is the managing body of the association.

There is a minimum of three directors (or two if there are only two members).

It is competent for all competences which are not expressly attributed to the General Meeting, either legally or statutorily.

The daily management can be delegated by the Administration Body to one or several persons, directors or non directors. When several persons are appointed, the Administration decides whether act individual, jointly or collegially.

Representation

The association is represented by the Administration Body. By default, it works collegially (meaning that all directors have to sign). It is however possible to derogate.

Therefore, it is advised to insert specific representation powers in the statutes (e.g. the association may be represented by the Chairman, Secretary, two directors acting together, etc).

For decisions pertaining to the daily management, specific arrangement can be made as to the representation.