Frequently employed in various fields such as sports, religion, culture, and philanthropy, the legal structure of an association is designed for individuals wishing to come together for purposes other than profit-sharing. It is not primarily intended for entrepreneurs.

On July 1st, 1901, Pierre Waldeck-Rousseau passed the law “relating to the contract of association,” which had a significant impact. This law guarantees one of the great republican freedoms.

Different Forms of Association, According to Urssaf

De Facto Association

A mere group of individuals, this association requires no legal formalities for its establishment. It lacks legal personality, thus cannot sign leases, open bank accounts, receive subsidies, or hire employees.

Declared Association

 Founders intend to give it legal existence and powers to act. Upon establishment, they must complete declaration formalities with the prefecture and publish in the Official Journal. Such associations have legal value, can acquire property, hire employees, and engage in commercial activities.

Approved Association

 A declared association with government endorsement, typically allowing regulated activities and access to public subsidies.

Recognized Public Utility Association

Endowed with extensive legal capacity, these associations can receive donations and bequests subject to prior administrative authorization. They are subject to administrative supervision, particularly concerning statutory amendments, donations, and asset disposition.

Note: Associations in Bas-Rhin, Haut-Rhin, or Moselle cannot gain public utility recognition but may receive donations and request recognition of their public utility mission.

Foundation

A distinct form of recognized public utility association, subject to administrative oversight. It involves the irrevocable allocation of assets for nonprofit general interest activities. The term “foundation” is protected.

Objectives

Associations generally pursue civil objectives, but commercial activities are not prohibited. Their primary purpose must be non-profit, although profit is not prohibited. Profit-sharing among members is prohibited.

Members

Unless otherwise stated in the statutes, anyone can join an association, with a minimum of two members required. Different membership categories are possible.

Legal Capacity

Without declaration, an association lacks legal personality. When declared, it has limited legal capacity, expanding if recognized as a public utility association.

Financial Commitment

Associations do not have capital. They may collect member dues if needed. Contributions in cash, kind, or labor are possible but not obligatory.

Liability

Member liability is limited to their contributions. Directors may be liable for mismanagement on civil, criminal, and tax grounds.

Operation

 Associations have flexibility in governance structures. They may have one or multiple presidents, a general secretary, or a board of directors. Typically, a board manages affairs, electing a bureau, including a president, secretary, and treasurer. Annual general meetings are common for account approval.

Fiscal Regime

Associations are generally tax-exempt unless engaged in lucrative activities.

Profitable Operations

 Licensing and advertising revenue may be considered lucrative. Non-lucrative associations with commercial revenues under €60,000 are exempt from commercial taxes. Beyond this, the non-profit status may be questioned.

Non-Profit Operations Non-profit associations are not subject to regular corporate taxes but may pay a flat tax on certain income.

Tax and Social Regime for Directors

Directors must serve voluntarily for non-profit management. The decision to pay them does not affect the non-profit status if certain conditions are met.

Resource Management Directors

may receive remuneration within certain limits without affecting the association’s non-profit status. Rules apply based on association resources over three previous fiscal years.

Advantages

Associations offer simple establishment, operational freedom, ability to receive donations, subsidies, and tax advantages for non-lucrative activities.

Disadvantages

 Transforming into a company is prohibited, profit-sharing is forbidden, fiscal reclassification risk, and assets cannot be distributed to members upon dissolution.