The association

An association is a legal form that allows people to work together to achieve a common goal. Find out everything you need to know about associations.

What is an association?

According to the law, an association is a legal entity with members. An association organises social activities to achieve a common goal with its members in fields such as sports, political interests, making music, or nature conservation.

You need at least 2 members to set up an association. At a general meeting of members, members make decisions about such things as appointing or dismissing the board, adopting the financial statements, and changingarticles of association. This meeting takes place at least once a year, and, as a rule, all members get a single vote. Associations also have a board, which is responsible for day-to-day operations.

There are several ways in which an association can secure funding for activities, such as members’ contributions, fundraisers, inheritances, grants, donations, and possibly income from a business. Associations never have the goal of making a profit, but that does not mean that an association should not make a profit. For example, associations are free to organize activities to secure funding, but the profits made by an association may never be distributed among its members. An association’s profits must be used for the purpose for which the association was founded.

Types of associations

There are 3 types of associations:

1. Association with full legal capacity

This type of association is set up through a civil-law notary and hasarticles of association. It has all the rights and obligations of a private citizen, such as buying property, borrowing money and receiving an inheritance. Do you want to qualify for grants or subsidies? Full legal capacity is often a requirement. The association is liable, but the directors themselves usually are not.

2. Association with limited legal capacity

You do not need a notary to set up an association with limited legal capacity. This association has fewer rights and cannot, for example, buy properties or receive an inheritance. Do you register the association with KVK? In that case, the association is primarily liable. The directors may also be personally liable. Do you not register the association with KVK? Then the directors are always directly personally liable.

3. Owners’ Association

Do you own an apartment? Then you are obliged to be a member of an Owners' Association (OA, VvE in Dutch). The OA looks after the common interests of the building’s various apartment owners, such as maintenance of the building and building services. The OA also has several obligations: it must meet at least once a year; it is required to amass a reserve fund, and must prepare annual accounts. Every OA must be registered with the Business Register.

Establishing an association

To set up an association with full legal capacity, you must go to a notary. They will draw up the deed and the association’sarticles of association, which contain some mandatory information, such as the name, the purpose, the manner of calling a general meeting of members, the way of appointing and dismissing directors and the destination of the association's assets in case of dissolution. To get full legal capacity, you need to register the association with KVK after it is established by the notary.

You do not need a notary to set up an association with limited legal capacity. You can simply do so at ‘your own dining table’. This type of association does not have to be registered in the KVK Business Register, but we recommend that you do register your association to limit liability.

When establishing an association with full legal capacity, the notary will also register the Ultimate Beneficial Owners (UBOs) with KVK. These are the people who are the ultimate stakeholders of the association, such as people who are entitled to more than 25% of the association's assets. An association may have 1 or more UBOs. To register UBOs in the UBO Registry, the notary uses Form 33 (in Dutch).

Owners' associations are not required to disclose their UBOs.


An association has no minimum starting capital. It costs between €400 and €1,000 to set up an association, depending on the notary and how complex the association is. It also costs €75 to register the association with KVK.

On top of that, it also costs money to keep records, such as membership records. An association that also operates a business must file annual financial statements once its turnover reaches a certain level. Which data you are required to submit depends on the size of the business. On average, keeping administrative records costs between €600 and €1,800 per year. Important: do not forget insurance!


An association has members. The association'sarticles of association describe how you become a member and what the terms are. The Board may always decide whether to admit new members unless thearticles of association set out separate procedures for this purpose.

Liability and debts

An association with full legal capacity is a legal entity. This means that, in principle, directors are not liable for the debts of the association, but the association itself is. However, there are exceptions to this rule. For example, directors are liable in the event of mismanagement or if the association is not (yet) listed in the KVK Business Register. Please make sure to notify KVK of any board changes within 8 days, as directors who have resigned but are still listed in the Business Register can still be held liable for any debts.

Directors of an association with limited legal capacity are personally liable for debts and obligations if the association is not listed in the Business Register. You can limit your liability by listing the association in the Business Register. If the association is listed, directors are liable alongside the association itself.

What to do when in debt?

You can no longer pay your vendors or pay off outstanding debts. What are your options? The important thing is to seek help quickly. Check out the debt flow chart to find out how to handle your business (association) and/or private debts.

Do you have an association with limited legal capacity and have not listed the association with KVK? Then the directors are personally liable for the association’s debts and obligations. You can limit your liability as a director by listing the association in the Business Register. If the association is listed, directors are liable alongside the association itself.

Signatory authority

The board, as a whole, has signatory authority, which means that the directors may sign contracts or perform certain legal acts on behalf of the association. Thearticles of association state which people have full signatory authority and which people need a co-signatory.

The Board may also grant a proxy to someone else, stating that this person may act on behalf of the association. You can register this proxy (in Dutch) in the Business Register. Although this is not mandatory, it is useful, as it is public information and means that third parties can simply check the Business Register to find out who is allowed to act on behalf of the association.

Board change

Keep in mind that changing directors may affect the municipal permits, financing, insurance, pension fund or bank account of the association. Consult the website of the institution in question to find out what to do if you decide on a board change.


Whether the association is subject to VAT (in Dutch) varies from one situation to the next. To find out whether your association has to file tax returns (in Dutch), contact the Tax Administration.

Corporate tax

Associations usually do not have to pay corporate tax on their profits, unless they also operate a business. In that case, the business must pay corporate tax on its profits. There are 3 criteria for operating a business:

  • a sustainable organisation of capital and labour
  • engaging in economic activity
  • having a profit objective

If the association is operating a business, it may be entitled to corporate tax credits, such as various forms of investment credits.

ANBI or SBBI status

Associations can obtain ANBI status (‘Algemeen Nut Beogende Instelling’, or Public Benefit Organisation), or SBBI status (‘Sociaal Belang Behartigende Instelling’, or Social Benefit Organisation). This status entitles you to certain tax benefits (in Dutch), for example, on receiving gifts and inheritances. To obtain ANBI or SBBI status (in Dutch) certain requirements (in Dutch) apply, such as representing the individual interests of the members and having social value. You can apply for ANBI or SBBI status with the Dutch Tax Administration.

Administrative records

Associations must keep records and are required to retain them for 7 years. The records of an association consist of:

  • Membership records, in which you record the personal details and contribution data of members.
  • A financial statement or annual report, showing all income and expenses. The articles of association state that the treasurer shall periodically present this statement to the members at the general meeting of members (ALV in Dutch).


An association may employ staff, paying payroll taxes and social security contributions as any other employer would. When hiring your first employee, register as an employer with the Tax Administration and report how many people are employed by you to KVK.

Compensation for directors

Most board positions within an association are filled by volunteers. You may choose to offer directors an expense allowance in the form of travel and subsistence expenses. Another way to compensate directors is with attendance fees, which means they get a fee for attending meetings. With this approach, directors are not employed by the association.

Another option is to employ a salaried director, in which case there must be an authority relationship, a clearly defined salary and work must be done for said salary. In this case, the association is an employer, and the director will be covered by employee insurance and will have to pay income tax on their salary.

If your directors are not salaried employees of the association, they are not covered by employee insurance, although they are free to take out discretionary insurance.

Volunteer Fee

You can offer volunteers tax-free compensation (in Dutch). The following conditions apply:

  • Volunteers receive compensation on an hourly basis.
  • Volunteers must be 21 years of age or older.
  • Volunteers receive a maximum compensation of €5 per hour, up to €190 per month and €1900 per year.
  • Compensation for your efforts is capped at these amounts.

If you do volunteer work for several organisations and receive more than the maximum compensation in total, you must report the compensation on your income tax return. Your compensation will then be subject to income tax unless it serves only to cover your expenses.

Dissolving an association

To dissolve an association, the members must first decide to dissolve the legal entity at the general meeting of members. This resolution must be put on the agenda in advance to be considered valid. To be adopted, a resolution to dissolve an association must receive a two-thirds majority of the votes cast, unless thearticles of association provide otherwise.

A dissolved legal entity does not immediately cease to exist, since it must be liquidated first. This means that all debts and sums of money payable must have been paid. If there is money left over thearticles of association state where the money should go.

Records retention

After an association is terminated, you must keep the association’s records for another 7 years. Make sure to designate a member responsible for keeping the records at the final general meeting of members. This person is registered in the KVK Business Register.

Keep in mind that dissolving your association may affect the municipal permits, financing, insurance, pension fund or bank account of the association. Consult the website of the (financial) institution in question to find out what to do if you decide to dissolve an association.

Foundation or association?

Foundations and associations are two different types of legal entities, and they are subject to different rules. The key issues to consider when choosing between these 2 legal forms are:

  • Foundations must be set up with a notary and listed with KVK. This does not apply to associations. It is recommended, however, because it limits the joint and several liabilities of directors.
  • An association has members and a board, while a foundation only has a board. In an association, the members elect the board, giving an association a more democratic character.
  • Because the members of an association have a vote in important decisions, decision-making in an association is more complex. In a foundation, the board decides.
  • An association is usually preferred if you want to engage in social activities together - sports clubs and neighbourhood communities are good examples of associations. A foundation is usually set up to achieve or commit to an idealistic goal – a charity is a good example of a foundation.
  • A foundation can be established by 1 person, whereas an association cannot.