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The association

The association is stipulated in the Civil Code (CC) from Art. 60. An association is an association of persons and/or companies who wish to jointly pursue a non-profit, non-economic purpose.

This means that the purpose of the association must be non-profit. Basically, sociable, political, scientific or charitable purposes are permitted, such as “organization of sports events for children”.

Not permitted would be, for example, “The purpose of the association is to generate financial benefits for its members”. However, it is important to note that an association is certainly allowed to operate a so-called “commercially run business”. However, this is only as a means to achieve its purpose. For illustration a few examples:

  • An association with the purpose of animal protection may operate a vegetarian restaurant and finance its campaigns with possible profits.
  • A sports club may run a bar at the annual village festival in order to increase its funds.
  • An association for the support of blind people may offer courses for guide dogs for a fee.
  • An association of friends of Spain is allowed to run a clubhouse with restaurant as a meeting place for its members and friends.
  • Martin, Melanie and Mirko want to found an association, which is to make stock exchange business with their free fortune in order to earn something besides. This is not allowed.
  • The three mentioned above are also not allowed to found an association just to run a small business together.

Somewhat simplified one can state the following: If the founders of the association want to generate their livelihood or part of it through income from the association, this would hardly be permissible. For this purpose, an organizational form from the Code of Obligations (e.g. sole proprietorship, general partnership, LLC or PLC) must be chosen.

If an association runs a commercial business, it must be entered in the commercial register. This means that the rules of commercial accounting must be observed (a simple “Milchbüchleinrechnung” or similar is no longer sufficient).

Only the association’s assets are liable for debts. This also applies if no membership fee has been set.

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