insights

A dive into the world of associations

let’s start with the basics!

The world of associations can be intimidating, especially if you are thinking of setting up a new one and you don’t know where to start. No need to panic, here are some essential tips.

ASBL or AISBL ?

In Belgium, if you want to set up a non-profit association, you have the choice between ASBL and AISBL. The former is a group of natural or legal persons pursuing a non-profit purpose whereas the latter is a group of natural or legal persons pursuing a non-profit and international purpose. Before your head starts to ache, here are key considerations:

  • The ASBL is easier to set up and enables to save time and money. For example, there is no need for a Royal Decree. Nevertheless, the purpose of the association should stay within the remit of the Belgian territory… Besides, its governance structure is less flexible.
  • The AISBL appeals to founders with a far-reaching scope and a flexible structure. However, the process of setting it up is more burdensome since it requires a deed drawn up by a notary and recognised by a Royal Decree.

One this first dilemma is solved, you can start thinking of your association :

Members

When creating an association, you should always bear in mind its scope and purpose. It needs to specific and clearly identifiable as if you were setting up a business. What will your association “sell”? What will be its products or services? What will its added value be? Why is there a need for creating a new association? Will it overlap or possibly clash with existing ones? Once the brainstorming is over, you map your potential members and identify the membership criteria in a precise, objective and legitimate way. At the onset, you definitely want to avoid sending mixed signals or creating misunderstandings.

Fees

Fees tend to mirror the economic relevance of members. They often amount to a small percentage of a company’s annual turnover. There are also fixed fees, especially if members are associations, individuals or other types of non-profit or para-public entities, such as universities. Beware of some pitfalls! Think for example of a large corporation with a large turnover but only marginal business turnover in the specific sector covered by the association. You want to be able to offer attractive membership fees based on legitimate and relevant criteria. But you also want to ensure that the fee base is easily monitorable and transparent.

When creating an association, you should always bear in mind its scope and purpose. It needs to specific and clearly identifiable as if you were setting up a business.

Competition law

When targeting members or setting the membership fee, you may also need legal advice to avoid the risk of breaching Competition law… Always bear in mind that antitrust law applies to associations too! Denying access or setting high and fixed fees to exclude some small businesses can create competition issues. Fines can be up to 10% of the sum of the total turnover of each member active on the market affected by the infringement…

Inclusiveness vs efficiency

Any association should be representative of its sector to be a credible voice. In the Brussels ecosystem, this criteria is essential when an association engages with European institutions. Inclusiveness brings legitimacy in the eyes of the European Parliament or the European Commission. However, do not overlook the trade-off between inclusiveness and efficiency. A heavy (and costly) decision-making process as a result of having to consult too many members can undermine speed and effectiveness in taking action and delivering impact. On the other end, moving too fast can make you lose the support of your members. Striking a good balance between the powers of the General Assembly and that of the Board can solve this dilemma.

Board in the driver’s seat ?

It’s obviously linked to the previous tip: a key aspect to consider when creating an association is its governance structure, i.e. the roles and powers of its governing bodies. The standard decision-making structure of an association usually combines a General Assembly that welcomes representatives from all the members and a Board (also called Executive Committee, Executive Board, Administration Council, Board Committee – you name it!) that includes a select (often elected) group of members. Both can have different responsibilities and powers, depending on what you think is best. A useful guiding principle can be the following:

  • inclusive associations: the General Assembly has the decision-making powers and the Board has a supervisory role;
  • efficient associations: the Board has the decision-making powers and the General Assembly has a supervisory role.

author

Luena Collini
Consultant