Non profit association (NPO)

The law on non-profit organisations (asbl) has been integrated in the new Code of Companies and Associations (CSA) since 1 May 2019. The reform is intended to simplify and clarify the law by bringing non-profits under company law.

Non-profits can now pursue unlimited profit-making activities. However, they are absolutely forbidden from distributing their profits. This latter point is, therefore, a distinguishing characteristic of non-profits.

Like any other company, a non-profit can now go bankrupt and benefit from insolvency and liability laws..

What is a non-profit organisation? (NPO)

A non-profit (ASBL) consists of an agreement (the articles of association) between a minimum of two people, called the founding members. 

The organization's actions must have a desinterested goal and cannot benefit its founders or members financially, except for the purpose stated in its articles of association..

Contrary to a commercial enterprise, the creation of a non-profit

• requires no minimum start-up capital.
• It can be created via a private agreement filed with the office of the clerk of the Commercial Court.

How does a non-profit operate ?

A non-profit consists of its members. Its management is entrusted to a board of directors. Contrary to members, the directors are responsible for the commitments made by the non-profit and for its proper management. Since September 2017, following a European directive, the directors of non-profits must also be registered in the UBO register as “beneficial owners”.

It is important to provide for a rotation in the composition of the members of the Board in order to bring in new ideas and to enable the means and objectives of the association to be continually questioned. As a general rule, we recommend a 3-year term of office.

The members of the board of directors are elected by the General Meeting (GM). The ordinary general meeting is held once a year with all of the members of the non-profit present. The general meeting provides the main lines of conduct of the non-profit and takes decisions about the points on the agenda, for example, any changes to the articles of association, approval of the annual financial statements, etc.

CHARACTERISTICS

A non-profit can have a legal personality if it meets the following conditions:

• The registered office is located in Belgium
• The non-profit has at least two founding members.
• The articles of association contain certain required information
• The articles of association, last and first names, professions and domiciles of the directors are published in the appendices of the Belgian Official Journal (Moniteur belge).

Otherwise, the non-profit is considered to be a de facto company.

LEGAL PERSONALITY

Legal personality is acquired on the day the articles of association and the procedures for the appointment of directors are filed with the office of the clerk of the competent commercial court.

A period of time can go by between the moment the ASBL is created and the moment it acquires its legal personality. Some transactions can take place during this period:

• Equipment purchases
• Leasing of premises
• Opening of a bank account
• Hiring staff

THE ARTICLES OF ASSOCIATION

The articles of association must be recorded in writing. They can be written as a private agreement, in the presence of the founders only, or as an authentic act before a notary.

The articles of association and the list of members of the first board of directors must be sent to the office of the clerk of the Commercial Court for publication in the Official Journal. You can submit them via the e-greffe website. You will then receive a company number for your association, in principle later in the week.

The list of members must also be filed with the office of the clerk within a month of the publication of the articles of association.

REQUIRED INFORMATION IN THE ARTICLES OF ASSOCIATION

The articles of association of the ASBL must include the following:

• The full name and address of the registered office of the NPO (we advise you to mention the region and not the full address. This avoids having to amend the articles of association if the registered office address changes within the same region).
• The purpose of the non-profit, i.e. a complete description of the disinterested goal pursued by the non-profit
• The last names, first names and nationalities of the founding members  If the founding members are legal entities, their names, legal forms, company registration numbers and registered office addresses must be provided
• The number of members (which cannot be less than two) and their type (founders or members)
• The maximum amount of member dues
• The conditions and formalities for member admission and departure
• The conditions and formalities for the appointment and resignation of directors and the length of their term
• The powers of the General Meeting (GM) and the procedure to call meetings
• The destination of the assets in the event of dissolution (generally, the name of a "sister" npo is indicated, i.e. an npo with a similar corporate object. If you wish to make an asset available to the npo and subsequently recover it, the articles of association must stipulate that the members have a right to recover their contribution)
• The duration of the non-profit when it isn’t unlimited

LEGAL AND ADMINISTRATIVE OBLIGATIONS

NPO's are required to register with the Crossroads Bank for Enterprises. They receive an identification number which must be included on all official documents.

If following a tax audit, it becomes apparent that the NPO is involved in profit-making activities, it will be required to pay the corporate tax. If its activities are not profit-making, it will be required to pay the legal entities tax.