The association is a corporate form that is frequently chosen in art and culture and also suited for individual artists, in particular for handling projects, exhibitions, performances, publications and similar undertakings.
To form an association, you need just one other natural person, who need not necessarily be engaged in artistic activities. Members of an association may provide services to the association as sole traders or be employed by the association.
An association may generate receipts (subsidies, sponsoring funds, ticket sales, etc.), but must not be profit-oriented.
Austrian citizenship is not required, however, the association must have its registered office in Austria.
At a glance
Separate legal personality
Number of persons required for formation
Minimum of 2 persons
Minimal, less than EUR 30
Meeting of members, executive body (management board) – minimum of 2 persons, supervisory body (optional)
Two auditors, with large associations statutory auditors of the financial statements
Personal liability of members
Personal liability of the members of the management board
Members of the management board are liable in case of personal fault
Minimum corporate tax
Accounting, financial statements
Small association: cash basis of accounting and statement of assets/liabilities;
(medium or large association: accrual basis of accounting, balance sheet, profit and loss statement (large association plus notes): no disclosure of the financial statements
What is an association?
Within the meaning of the Association Law 2002 (Vereinsgesetz 2002), an association is a legal person. As such, it has legal capacity and takes part in legal life with all pertaining rights and duties through its bodies. It may enter into (work) contracts, for e.g. renting office space, acquiring assets, receiving subsidies and organising cultural events, it can sue and be sued.
Who can found an association?
At least two persons (natural and legal persons) who join forces on a voluntary and permanent basis, based on Statutes (agreement on foundation), to pursue defined, non-lucrative objectives together. Non-lucrative objectives are such which are not for profit.
While an association may engage in gainful activities (privilege of secondary objective) and even generate profits, it must not distribute these profits to the members but reinvest them in the association, in particular to attain its non-lucrative objectives.
Good to know
The corporate form of an association cannot be used for an activity which is exclusively profit-oriented.
Founding an association
When founding an association, you must differentiate between its establishment and its formation.
An association is established through the adoption of Statutes by its founders (minimum of 2 persons). As a legal entity, the association is formed only upon notification in writing of the establishment of an association sent to the association authorities (province police directorate, district administration authorities) and its non-prohibition (duration 4-6 weeks) by the latter.
To found an association in Austria, you must have completed 14 years of age.
Procedure / Foundation
- Establishment of an association: the founders agree on the Statutes
- The founders or the legal representatives of the association, if they have already been appointed, notify its establishment to the competent association authority by sending a copy of the Statutes.
- If the documentation is incomplete or faulty (e.g. risk of being confounded with another association), the authority will request that the lacking or corrected documents be filed subsequently. The authority checks the Statutes as to their conformity with the law. If the association is found to be unlawful in terms of its objective, name or organisation, the authority will state that it will not allow the foundation of the association by way of an official ruling (Bescheid).
- If the check ends positively, the association may take up its activities after expiry of a four-week or, as the case may be, extended six-week period, or even before the expiry of this deadline, if an explicit invitation to take up the association’s activities has been issued by way of official ruling (formation of the association), and is then deemed a legal person.
The association authority will enter the relevant data of the new association in the local association register. These data are then also available in the Central Association Register (ZVR). The extract from the association register provides information about the legal status of an association and its current representation. Extracts from the association register with up-to-date information, may, if needed, be queried online (free of charge) or requested from the authority (subject to a fee).
Good to know
Associations must indicate their ZVR number in legal transactions with third parties (e.g. letters, emails, contracts, quotes, invoices). Failure to indicate the ZVR number is a punishable administrative offence.
The Statutes are the legal basis for the organisation of an association. The founders and the bodies of the association, who may pass a resolution on the adoption of amendments to the Statutes, are free, within the limits of the law, in the way they organise the association. In general, the Statutes must be worded unambiguously and drafted in German.
The following information must be provided:
|Name||must allow to infer the objective of the association, must not be misleading and must not lead to confusion with existing associations and institutions|
|Registered office||must be in Austria|
|Objective||detailed description of the activities envisaged to achieve the objective and how the association is financed|
|Acceptance as a member and termination of membership|
|Rights and duties of the association members||Bodies of the association and their tasks, in particular a clear and comprehensive statement as to who manages the business of the association and who represents the association vis-à-vis third parties|
|Mode of appointment of the bodies of the association and duration of their term of office||(maximum of 5 years)|
|The requirements for resolutions to be validly adopted by the association’s bodies|
|Dissolution of the association|
Good to know
The bodies of an association are under an obligation to hand out a copy of the Statutes to every member upon request.
The founding costs are less than EUR 30. The fees are due after the proceedings have been closed. For that purpose, a pay slip is usually sent.
Bodies of the association
An association is a legal person which acts through its bodies. The Statutes must necessarily lay down at least two bodies:
Meeting of members
The meeting of members, also called annual or general meeting, serves the association members to form a joint will and must be convened at least every five years.
The executive body, also management board or executive board, manages the business of the association and represents the association vis-à-vis third parties. It must consist of at least two natural persons (e.g. chairperson, deputy). In addition, you would normally have a secretary and a treasurer. If the executive body consists of only two persons, all decisions must be taken unanimously. The rights and duties of the bodies of the association are set out in its Statutes.
The first-time appointment of the legal representatives of the association may be carried out before or after the formation of the association. If they are appointed after the formation of the association, such appointment must be conducted within one year. This deadline may be extended on application. Every further appointment of legal representatives of the association at the intervals set out in the Statutes (“term of office”) is to be notified to the association authorities by way of election notice within 4 weeks after the resolution has been adopted at the latest, even if all previous legal representatives of the association were reappointed.
The appointment of a supervisory body is not mandatory. If the association has a supervisory body, the latter must consist of three natural persons pursuant to the Association Law. Supervisory bodies may not be a member of any other body of the association (with the exception of the meeting of members). They supervise the activities of the association and are appointed by the meeting of members.
Auditor and statutory auditor
Every association must appoint at least two auditors. An association which is required to submit extended financial statements must, in addition, appoint a statutory auditor for the financial statements. Appointments are made by the meeting of members.
The auditors scrutinize the regularity of the accounts and of the use of the funds as set out in the Statutes.
Members of the association
The rights and duties of the association members, the provisions on the admission as a member and on termination of membership are laid down in the Statutes.
Various forms of membership exist: regular members, extraordinary members, honorary members.
The executive body is under an obligation to inform the members at the meeting of members on the activities and the financial operations of the association. Outside the scope of the meeting of members, the executive body must provide this information to the members within four weeks, if such is requested by at least one tenth of the members indicating a reason.
As a legal entity, the association is liable for the payment of its debt with the entirety of the association’s assets.
An association which rents a venue for an event is liable for the payment of the agreed rent and for compliance with all other contractual obligations such as avoidance of noise, cleaning, safety of visitors etc.
Management board members and members of the association generally are not liable for paying the debts of the association, unless a liability by the members of the association is explicitly laid down in the Statutes. In such case, admission as a member generates a liability for the payment of debt. If however a board member fails to meet his/her statutory duties or such which arise from the Statutes or is in breach of lawful resolutions adopted by the bodies of the association, he or she shall be liable for the resultant damage or loss. This equally holds for the auditors of the association.
Good to know
Before an association has been formed, the acting persons (= founders) are jointly and severally liable for all debts entered into. Liability passes on to the association upon its formation.
If a sales contract for the purchase of computers, office furniture, etc. is concluded, the founders or the legal representatives of the association are liable for the payment of the purchase price until the association has been formed as a legal entity.
Receipts such as membership fees, donations, subsidies, gifts, legacies, etc. which are used to attain the association’s objective are not subject to tax.
An association only becomes liable for taxes if it renders, and intends to repeat rendering, services to members or non-members for consideration (receipts). As a requirement, an operation (business) must generate sales of a considerable amount (more than EUR 2,900), at least by an annual average.
Accounts / Financial statements
If the annual income or expenditure of an association is less than EUR 1 million, it is sufficient to keep cash-based accounts. If the ordinary income or expenses exceed EUR 3 million each, or if the annual volume of donations is more than EUR 1 million each in two consecutive financial years, the association must prepare extended financial statements (balance sheet, profit and loss statement, notes) starting with the next following financial year.
The financial year of an association need not correspond to a calendar year, however it must not exceed twelve months.
An association may voluntarily decide its dissolution or be dissolved by the authorities. If the meeting of members resolved to dissolve the association, this results in liquidation proceedings in which the association’s assets are realised, debts are settled and the remaining assets are transferred to the purpose as set out in the Statutes. The legal personality of an association generally ends on registration of the dissolution in the association register.
MODEL FORM Statutes
MODEL FORM Notice of election (appointment of the legal representatives)
MODEL FORM Notice of amendment of the Statutes
The provisions governing the association are laid down in the Association Law.
Further links / information:
The German text of the Association Law 2002 (Vereinsgesetz 2002) in its current version is accessible in the Federal Law Information System RIS