ASBL: NON-PROFIT ASSOCIATION

ASBL: NON-PROFIT ASSOCIATION

The non-profit association is a group of natural or legal persons pursuing a common purpose of an ideal nature, solidarity or social utility; this means that the members of the association cannot derive any material benefit from it. This type of association must be composed of at least two members, who may be natural or legal persons, whose nationality is of no importance. The law distinguishes two categories of members:

  • active members
  • associate members

The main change for ASBL is that they are no longer “non-profit associations”, but ” associations without profit distribution”. According to the new legislation, Asbls can develop commercial activities without any limit, but the profit made on these activities cannot be distributed to founders, members, administrators or any other natural or moral person. The ban on distributing profits already existed, but it is reinforced today. 

Specifically, the direct and indirect distribution of profits to members, directors or third parties is expressly prohibited, unless it is part of the disinterested objective set out in the statutes of the association. The declaration of excessive expenditure will be considered as an indirect form of distribution. However, commercial activities will need to be closely monitored, as the tax system will not be far away. Under tax law, commercial activities must be ancillary in order for the ASBL to be subject to corporate tax. Otherwise, it will be taxed under the corporation tax scheme.

The statute 

The rights and obligations of the members are determined by the articles of association (and not by rules of procedure). The statute must be established in writing and may be a simple act in private form, that is, in the presence of the founders only, or an authentic act drawn up by a notary. According to the law, the statutes must be drawn up in at least two copies and the following information must be present in the bylaws:

  • The words “non-profit association” or the acronym “ASBL”; 
  • The name of the association, the choice of name is free; however, no other association or foundation may bear the same name;
  • The indication of the region in which the registered office of the association is established; the seat of a Belgian asbl must be located in Belgium, which does not mean that an association cannot act abroad; 
  • The non-profit objective pursued by the association and its activities;
  • The conditions and formalities for admission and departure of members; 
  • The rights and obligations of a full member;
  • The powers and procedures for convening the general meeting and the manner in which its deliberations are brought to the attention of the members and third parties; 
  • The rules governing the appointment and dismissal of directors, including the rules governing the duration of their term of office, shall be binding;
  • Provisions concerning the possibility for certain persons to represent the association and/or to ensure its day-to-day management;
  • The minimum number of members;
  • The maximum amount of the contribution of persons wishing to join the association;
  • The disinterested purpose to which the association must assign its assets in the event of dissolution;
  • The life of the association when it is not unlimited.

Who is responsible within the association? 

Members of an asbl have limited liability, so their private assets are not in any way related to the asbl; the administrator of the association, however, may be held responsible in case of mismanagement. 

The articles of association are also online!

In fact, the online application has significantly reduced the administrative burden of setting up an asbl; it is enough to identify yourself using your own electronic ID card and fill out the application form, upon receipt of payment, the association will be automatically created in the Banque-Carrefour des Entreprises and published a few days later in the Belgian Official Journal. If the association carries out VAT activities, a VAT registration number will be required.

What are the fees for setting up an ASBL? 

No initial capital is required for the establishment of an ASBL; the only costs are publication costs in the Belgian Official Journal amounting to EUR 154.70 (excluding VAT) in paper form, and registration via electronic (electronic) register costs only EUR 111.80 (excluding VAT). These fees are indexed on an annual basis. 

Any change in the statutes or composition of the board of directors of an asbl must also be published in the Belgian Official Journal and is subject to the publication fee of EUR 104.90 (excluding VAT) whether sent in paper or electronic form.

When the assets of a non-profit organisation exceed 25,000 euros, a property tax is taxed to offset inheritance taxes, equal to 0.17%. Non-profit organizations with assets of less than 25,000 euros do not pay taxes.

The accounting of an ASBL 

From an accounting point of view, non-profit organisations fall into two categories, each with specific accounting obligations: 

  • Large or Small Asbls: are the large organizations whose accounts are comparable to those of a commercial company; these non-profit organizations must meet at least two of the following criteria: 5 workers, 250,000€ turnover, a wealth of 1,000,000€.
  • Simple ASBL: are those organizations that have at least two employees and generate 20.00€ of revenue. 

Dissolution

According to the law, the liquidation of the association can be pronounced when the following terms are not found in the statutes:

  • the name and indication of the region in which the headquarters of the association is established;
  • a precise description of the disinterested objective pursued by the association and of the activities which serve to achieve that objective.

The association can also be dissolved by judicial means. The Articles of Association must be deposited with the Registry of the Court of Companies (of the place where the Association has its seat) within thirty days of signature. However, until such time as the Statute has been filed with the Works Tribunal, the association shall have no legal personality. It is considered “association in formation” until the deposit. Some time may elapse between the time when the association is formed and the time when it acquires legal personality. During this period the association can already execute a limited number of acts:

  • buy equipment
  • rent a building
  • open a bank account
  • recruit

Approval of annual accounts

The administrative body must present the annual accounts to the general meeting, which approves them. They shall be submitted annually and at the latest six months after the financial year. The administrative body must also have the budget for the following financial year approved by the general meeting.

Publication of annual accounts

Each year, non-profit organisations which do not exceed more than one of the above criteria must submit their accounts to the Commercial Court Registry. If an association fails to do so, it can be dissolved. Non-profit organisations meeting two of the above criteria must submit their approved accounts to the National Bank of Belgium within 30 days.

The new law adopted by the Parliament obliges all Asbls, including the smallest ones, to deposit their annual accounts with the central budget of the National Bank. Previously, this obligation only concerned large Asbls. It was enough that the small associations deposited them in the chancellery of the Chamber of Commerce.