Green technologies, social engagement and citizen representation – social Startups are a small but fine community that is growing steadily in Germany. However, in addition to sole proprietorships and companies, associations in economic life also act as carriers of entrepreneurial activities. When is an association worthwhile for charitable projects and startups?
Association as a legal form for startup projects
If people join together to form a long-term organization that pursues a specific, common, idealistic purpose, one speaks of an ideal association. The Association Act 2002 requires that the association itself must not be directed towards profit. Nevertheless, he can be considered as a company owner because he is also allowed to be commercially active (secondary purpose privilege) and may even make profits if he only does not distribute these to the members of the association.
Many believe that at least 7 people are necessary to establish. A common misconception. Two people can also found an association. In the long term, the association must have at least three members, otherwise the general assembly does not have a quorum. However, association law stipulates that an entry in the register of associations should only be made if at least seven people have signed the statutes. Before founding a registered association, you should wait until seven founding members have found each other. However, these can also be friends, partners or parents.
In principle, only the association with the association’s assets is liable for the association’s liabilities. The administrators and members of the association are only personally liable with their private assets if this results from other statutory provisions or on the basis of a personal legal obligation.
The notary fee for the certification of the registration is charged (around 25.00 euros plus writing and delivery fees. In addition, the registration fee for an entry at the responsible local court (around 50 euros) and the announcement of the entry (between 10 and 30 euros).
The advantages at a glance
Associations do not necessarily have to be non-profit making – of the approximately 600,000 associations in Germany, however, this is true of the majority. The association as a legal form offers non-profit organizations some important advantages.
- The association is tax-privileged or even completely tax-exempt.
- The leadership is elected democratically, all decisions are made by the general assembly by majority vote.
- The bureaucratic effort involved in running an association is considerably lower than that of a commercial enterprise.
- Initiatives recognized as non-profit can often use public resources cheaply or free of charge.
- There is often public aid and support for non-profit institutions (such as support and placement of personnel).
- State subsidies, federal subsidies or EU subsidies are available to charitable initiatives.
Even if a lot speaks for the gGmbH, especially for professional organizations, the association is indispensable. On the one hand, one should not underestimate the external impact: clubs are still considered to be classic grassroots democracy and thus true to their motives.
And: With the association, changing members is quite unproblematic. In the case of the gGmbH, on the other hand, business shares must be transferred with notarial certification. An up-to-date list of shareholders must be deposited with the local court. This high administrative effort is only worthwhile if the shareholders remain steadfast.
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