German law on associations – Horak Attorneys at Law, Hanover

From the establishing to the termination of the association there are always a lot of aspects to take into consideration. If you want to found an association or wish to be informed as a member or as committee, it would be a pleasure for us to advise you.

What is a non-profit association?

An Idealverein is an association whose main purpose is non-commercial. This civil-law classification does not by itself establish charitable or tax-exempt status. Typical characteristics include:

Between several members under an association´s name;
Which is voluntary and has been created for a certain duration;
Which pursues a common ideal purpose,
Has an executive board,
This, as an association, does not depend on the change of members and is therefore corporately structured.

For non-commercial purposes, actually means that the main goal of the organization is not an economic activity, or the realization of profits. The possible non-profit purposes are various. This shows the colourful environment of associations in Germany: associations for the promotion of sport, culture, nature and the environment or charitable purposes are mainly organized as non-profit organizations. However, even those non-profit societies can be active economically, namely, if this activity is clearly subordinated to the main goal of the corporation.

Example: a sport club remains a non-profit association, even if it runs a restaurant in the clubhouse. In this case, the economic activity is only a secondary purpose – the main goal of the association is the promotion of the sport.

Creation of a non-profit association

Some information regarding the founding members, the protocol of foundation, the constitution and registration in the association register will be explained in the following list:

I. Preliminary consideration for the constitution of an association

An Idealverein may obtain separate legal personality through registration under section 21 BGB; registration is not compulsory for every such association. An unregistered association is governed by section 54 BGB, revised with effect from 1 January 2024, and can nevertheless hold rights and obligations and sue or be sued. Members are generally not liable merely because of their membership. A person entering into a legal transaction with a third party in the name of an association without legal personality is personally liable under section 54(2); multiple acting persons are jointly and severally liable.

The liability of an acting person under section 54(2) concerns transactions concluded in the association’s name. It should not be confused with a general liability of every member who is visible in the association’s activities.

A registered association can acquire property and other rights in land. Recent higher regional court decisions also recognise the land-register capacity of an unregistered Idealverein after the MoPeG reform, without prior registration in the association register, for example OLG Braunschweig, 11 June 2025, 2 W 47/25. The former blanket statement requiring all members to be entered instead of the association is outdated. Identity, representation and the required land-register evidence still need to be established.

Example: Registration can simplify proof of the association’s identity and representation for property transactions. Under the cited decisions, registration is not a general prerequisite for an unregistered Idealverein to hold a registered property right.

An association, which has not been registered into the register of associations, is, on the other hand, easier to establish as there are also no registration obligations. For the pursuit of short-term goals, this form of association can be more meaningful than a registered association.

II. Founding Members

An association may initially be founded by two persons. Entry in the association register generally requires at least seven members under section 56 BGB. Section 59(3) requires the constitution submitted for registration to bear at least seven members’ signatures and state the date of establishment.

A two-person association may admit further members before applying for registration. The constitution must then be signed by at least seven members, not merely by one of them. Founders may include natural persons and eligible legal persons or other organisations.

All founding members must be legally competent, as the founding act is basically a contract. Minors between seven and eighteen years old can found an association only with the consent of their legal representatives, usually their parents.

A person with an appointed supervisor/carer can become one of the founding members, if it is not considered incapable of acting in law. If one of the founding members has not been legally competent during the foundation of the association, the constitutive act would still be effective if only the necessary minimum number of founding members has been legally competent.

III. Founding protocol

The founders agree to establish the association and adopt its constitution, then appoint the first board in accordance with it. A founding record documents resolutions and elections; its signatures follow the applicable requirements, especially the constitution. There is no general statutory rule requiring every founder to sign that record. The requirement for at least seven signatures on the constitution for registration is separate.

An unincorporated association can be formed with the resolution, the constitution and the election of the Management Board. If the organization is intended to be registered in the association register, it is referred to the registration of the so-called “pre-association”.

IV. Constitution

Every organization needs to have a constitution, which is decided according to the drafting of the founding protocol.

1. Content

Associations generally have restrictive regulations in the statutes of associations that should be carefully considered.

2. Form

There are no formal requirements for the drafting of the statutes, but the registered association has to submit a signed constitution to the association register according to §59 para.2 no.1, para 3 German Civil Code - BGB-. Basically, also in case of a non-registered organization is always recommendable to present the written form. The constitution must be presented in German. In Saxony and Brandenburg, Sorbian constitutions with a German translation are still allowed.

V. Application for the registration in the association registers

For the registration of an organization in the association register, you firstly have to submit an application and a further documentation to the court of jurisdiction. Many association registers are consultable online.

1. Responsible Local Court

The responsible local jurisdiction is in principle the Local Court, in whose district the association in based. The federal states can, however, assign the associations of several districts to a particular district court. Several federal states have benefited from this so-called concentration allowance, in German “Konzentrationsermächtigung”.

2. Registration

In accordance with §59(1) and (2) BGB-German Civil Code-, by registering an association, it is fundamental to submit:

a written application,
a copy of the signed constitution and, where relevant as evidence of the required resolutions, the founding record;
a copy of the appointment of the Managing Board.
A written application

A written application shall include the followings:

The registration of the founded association for registration in the association register,
Names, dates of births and addresses of the elected members and,
The officially certified signatures of the members of the Management Board who are authorized to act as representatives:

The registration declaration must be made by the board members required under the association’s representation rules and be publicly certified under section 77 BGB. All board members do not invariably need to sign. Notarial certification by the statutory video-communication procedure under section 40a BeurkG is also permitted.

Note: State law may authorise additional officials to provide public certification. Their current competence and the suitability of the certification for association-register purposes must be checked; ordinary administrative certification does not automatically suffice.

The application form can be created by the association itself. The notary can also create such a written letter and forward the application to the court. Additional costs are charged for the registration application.

Documents to attach

Under section 59(2) BGB, copies of the constitution and the documents appointing the board must accompany the application. The constitution should carry at least seven members’ signatures and the date of establishment. A copy of the founding record can document the board election. There is no general requirement in this provision to submit the original constitution in addition.

3. Costs

Court and notarial fees are governed by the GNotKG, which replaced the former KostO. The court fee for initial registration is EUR 75 under cost item 13100, subject to applicable exemptions and expenses. Separately chargeable signature certification under item 25100 carries a 0.2 fee, at least EUR 20 and at most EUR 70, subject to that item’s exceptions and interaction with drafting fees. Drafting, other services, expenses and VAT may affect the total; this is not an all-inclusive incorporation price.

VI. Registration of the organization in the association register

According to the § 64 BGB, the following can be entered in the association register:

The name of the association with the addition “registered association” or in different German statutes with the “e.V.”,
The location,
The formation of the constitution,
The Name, date of births of all members of the executive board,
Regulations of the constitution concerning the authorization of the executive board and the resolution.

Current section 66 BGB concerns retention by the local court of documents filed with an application. The former description of publication under section 66(1) and return of the original constitution is outdated.

Registration gives the Idealverein separate legal personality under section 21 BGB. The pre-association continues as the registered association (e.V.); its existing rights and obligations remain with it. Section 79 concerns register inspection, not acquisition of legal personality.

VII. Inspection in the register of associations

The register and submitted documents may be inspected under section 79 BGB. Since 1 August 2022, register contents and electronically available documents have been available free of charge through the joint register portal of the German states. Special services such as certified copies may still incur fees.

Continuing operation of the association

I. General Meeting of the Members

General meetings require proper notice, competence and voting procedures. Section 32(2) BGB permits hybrid meetings and allows members to resolve that future meetings may also be convened virtually. The notice must explain how electronic participation rights can be exercised. Under section 32(3), a resolution without a meeting requires every member’s consent in text form. Permitted departures in the constitution under section 40 must be considered.

II. Management Board

Each organization must have an executive board. This can consist of one or more persons. This chapter deals with the legal position, the tasks, appointments and activities of the Management Board.

III. Member rights and membership requirements

Members have rights and duties. Under section 38 BGB, membership is generally non-transferable and non-inheritable, and membership rights cannot generally be exercised by another person. Permitted departures in the constitution under section 40 BGB must be considered.

IV. Subsequent changes in the association

In the course of existence of an association the conditions of the organization can change and new requirements can be placed on the association. This may mean that the statutes of the association must also be subsequently adapted.

Termination of the association

Just like the foundation of a registered association as a legal subject with its own legal personality, its termination is regulated by the right of association. The termination of a registered association usually requires its dissolution and, in most cases, a subsequent liquidation. There are, however, cases in which the association is extinguished in a different way, such as a conversion.

The right of association comprises sufficient regulations for the termination of the association. These regulations are often mandatory, so that in this area, the design possibilities of the constitution are limited. The legal regulations allow an orderly termination of an association even without additional statutory provisions.

It would be therefore profitable to examine if at the time of the founding of the association, the extent of the legal regulation in regards of resolution and liquidation through the determination of constitution for the association, should have been changed, complemented, or completed. Especially in the case of organizations that are established only for a certain amount of time (in this case it is already established at the time of the foundation that they will have to be closed again in the foreseeable future), it should be carefully considered whether particular regulations for the termination of the association have to be taken or not.

I. Dissolution of the association

An association can be terminated for various reasons and in different ways. However, the legal consequences of the dissolution are broadly the same.

II. Liquidation of the association

If, after the dissolution of an association, its liquidation is necessary, the association shall continue until the end of the liquidation, in accordance with §49 (2) German Civil Code -BGB-. Once entered the liquidation phase, the association activities end. As an alternative to the previous association purpose a transaction process starts: that includes the termination of all on-going businesses, monetarization of the existing association assets, reimbursing of the creditors etc.

The liquidation association also has its members and its general assembly, which can continue to convene. During the liquidation, the general assembly has still the faculty to change the articles of the associations. Furthermore, this latter can in particular, appoint or dismiss liquidators. As long as the association has not been terminated, and the reasons for liquidation have not been precluded, this can also decide on the continuation of the association. Such a resolution of continuation is generally always plausible, if the association has been dissolved by resolution of the Annual General Meeting or after the expiration of a deadline.

1. Liquidation responsibility

For the liquidation of an association, the German law on associations provides with a particular association´s body. They replace the Executive Board with a statutory management and representation body. The so-called in German “Geborene Liquidatoren”, literally translated as “born liquidators”, are the members of the Management Board who are also responsible for liquidation pursuant to § 48 para.1 sentence 1 German Civil Code-BGB-.

When the association enters the liquidation stage, the members of the Management Boards become liquidators. If section § 48 para.1 sentence 1of the (BGB) German Civil Code is applicable or the task of liquidation is explicitly assigned to the Executive board, then the Board members are subjected to continuity of office. No special order is required to make the members of the Management Board liquidators. However, the association may also determine other persons as liquidators or the General meeting could also appoint other liquidators. If the constitution of the association does not establish any particular rule for the establishment of the liquidators, they will be nominated in accordance to the Management Board. In case a dissolved association has no liquidators and the General meeting can not provide them, because there is no convocation body without the liquidators, then will they be appointed by way of emergency order pursuant §48 para.2 of the German Civil Code (BGB) in conjunction with §29 BGB by the District Court.

2. Legal rights of the liquidators

According to § 48 para. 2 of the German Civil Code (BGB), the liquidators have particular legal rights in the Management Board. They are, therefore, the managing and representative body of the association. As well as the members of the management board, the General Meeting may also, at any time, recall liquidators pursuant to § 48 (2) in conjunction with § 27 (2) sentence 1 of the German Civil Code (BGB). The liquidators can also resign their office at any time without observing a deadline. The scope of the management authority is determined by the purpose of the settlement. If an association has several liquidators, these resolutions on the management of the association may only be adopted unanimously in accordance with § 49(3) of the German Civil Code (BGB) and the association may only be represented jointly.

Note: By means of the constitution, however, a different majority may be appointed for the resolution and other forms of representation; in particular also a majority or individual representation for the liquidators will be included.

3. Tasks of the liquidators

According to § 49 para.1 of the German Civil Code (BGB), the liquidators have to transact the association; they have to terminate the ongoing business of the association, to collect receivables of the association, to convert the remaining assets into money, to satisfy the creditors and to pay the surplus to the persons entitled on devolution.

The liquidators of the General Meeting have to take account of their activities. As the constitution does not include any particular regulation, a final statement must be issued in accordance with §§ 48 (2) in conjunction with §27 (3), 666 of the German Civil Code (BGB) and, if necessary, a scheme of distribution for the association´s remaining assets is to set. If the liquidation takes a long time, the liquidators must also properly manage the existing assets, for instance, by investing existing capitals etc. The liquidators must also decide if the constitution does not contain a regulation as to whether and where books and documents of the association are to be kept after the termination of the organization. It is also possible to let the General Meeting to decide and successively execute their resolution.

Under section 50 BGB, liquidators must publish notice of the dissolution and invite creditors to submit their claims. Publication is in the outlet designated by the constitution. If none is designated or it has ceased publication, section 50a requires use of the publication outlet designated for the competent local court. The former reference to section 66 is outdated.

Known creditors must also receive a specific invitation to submit their claims under section 50(2) BGB. This concerns creditors, not merely the association’s members. The law does not prescribe a particular form for this individual notice; evidence of receipt should be retained.

Note: It is, however, advisable to provide a written notification and to communicate it to the creditor so that their entry to the dispute could also be proven.

If the liquidators do not comply their notification obligations pursuant to § 50 of the German Civil Code (BGB), and if a creditor decide to suit a claim for damages against them, and they are considered to have acted culpably, the liquidators will be obliged to compensate them.

Section 51 BGB prevents distribution of the residual assets to the persons entitled on dissolution before one year has elapsed after publication of the dissolution. It does not prohibit payment of the association’s creditors during that period. Section 52 governs deposit or security for specified outstanding claims. Premature distributions may expose liquidators to liability under section 53 where the statutory conditions are met.

Note: Liquidators must respect the statutory waiting period before distributing residual assets to the persons entitled on dissolution. Payments to satisfy creditors are a separate matter.

4. Conclusion of the liquidation

Liquidation is completed when creditors have been satisfied or appropriately secured, the remaining surplus has been distributed to the persons entitled on dissolution, and all other necessary winding-up measures have been completed.

The conclusion of the liquidation is a prerequisite for the termination of the association. With the termination of the association, the office of the liquidators also ends. If the liquidation is terminated, the register of the association is closed in the association register according to § 4 (2) No.2 of the regarding Act (in German “Vereinsregisterverordnung”). The registry court may also close the register of a dissolved association in accordance with section 4(2) sentence 2 of the“Vereinsregisterverordnung”, if no further registration took place during one year after the registration of the dissolution and a written enquiry from the register court remained unanswered.

General Information on Taxation Law

Particular requirements for the formation of the association and the management of the business may result into the taxation law, for example if an association wants to obtain some tax-benefits.

Tax-benefits are granted to non-profit organizations. Those associations

Promote the general public in material, intellectual or moral areas (§ 52 AO), in a non-profit making way,
Assist people who are in need or,
Promote religious communities (§54 AO).

In order to be recognized as a non-profit by the financial administration, association and actions must meet specific requirements, which can not be described in detailed here.

For further information, please do not hesitate to contact us.