Associations

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If you have a project and you think you’ve found the right team, you might perhaps want to consider setting up an association. If correctly formed, it should offer a useful decision-making structure and grow into a well run organisation capable of actually achieving its goals.

Creating an association is quick and easy, managing it correctly does require some time and effort, though.

Associations are corporate entities, i.e. a gathering of physical or legal persons, with an aim to achieve a common purpose. Such purpose may be of general interest to society as a whole, or of interest only to its members. The association is a legal entity in itself, and as such will have assets and liabilities, and be subject to paying tax.

In contrast with companies, associations are always not-for-profit organisations. They do not issue shares and have no owners, hence they are open to as many members as their rules would allow.

The fact they are not-for-profit doesn’t mean they cannot do business. They can, yet any net earnings must be put towards achieving their statutory purpose.

As it has no owners, when an association dissolves it enters liquidation, terminating business and paying off any remaining debts. Once done, any remaining assets will not be distributed among its members but will be donated, as foreseen in the statutes, normally to associations with a similar purpose.

As such legal entities, ordinary member’s liabilities are limited to the assets (present and future) the association could have.

The one exception is board members. They have an unlimited personal liability for misconduct or negligence when acting in the name of the association, both before third parties and ordinary members.

Also board-members of non-inscribed associations are personally, jointly and severally liable for the association’s debts.

Creating an association
All you need to create an association is three founding members signing a simple document expressing their will to establish the entity, giving it a name, approving the statutes and appointing its provisional representatives.

This document is signed by all and dated, followed by copies of the personal identity document of each founding member.

Should they be a legal person, they’ll require a certificate of their board agreement to create an association. Valid proxies for founding members acting via representatives will have to be provided too.

The statutes should show the name, address and intended duration of the association, be it for an indefinite amount of time, up to a specific date or until a certain objective has been achieved. The board should have power to change address say within a certain area (without having to alter the statutes).

You’ll need to specify the main geographical area where the association will be operating; if anywhere in Spain, you should inscribe your association in the National Registry (a €37,75 fee applies); should it be mostly anywhere in Andalusia, you’d be recording it at the Andalusian Registry (free of charge and with offices in all provinces).

The statutes must describe clearly the purpose, objectives and activities of your association. Generic statements are not accepted. Your description will establish the association’s legal capacity, above which it will not be able to act (unless the statutes are altered).

You will want set out admission requirements, as well as member’s rights and obligations, penalties, membership suspension and in the last instance, exclusion. Remember, an association is basically a democratic organisation.

Although members who are often late with their fees will be deprived of their right to vote, the clause excluding them from meetings or suppressing their right of voice is null and void.

All members participate in the General Assembly, which approves management and accounts and elects the board by simple majority. Agreements to sell assets, remunerate the board members, alter statutes or dissolve the association, all require an absolute majority.

Any other decisions may be taken by the board, in charge of executing the assembly’s agreements. Statutes regulate the election of its members, the duration of their mandate, and the rules and procedures governing their meetings, agreements and voting.

All associations must keep an updated record of their members, as well as minutes of their general and board meetings.

Statutes must lay out how the association is administered and will describe existing initial assets (if any) as well as the planned sources of income. Accounting books include inventory, a balance sheet and a profit and loss account, as well as any other as required by law.

Any member may access any of the association’s documents via a request to the board

Words Cristina Falkenberg

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