Drafting the Articles of Association in Germany

If the association is seeking nonprofit status or if clubs or associations are already recognized as nonprofit organizations, complicated requirements of German nonprofit law must be complied with. This requires individually drafted articles of association for the association.

When founding an association, the intended activities must be presented precisely. The use of model articles of association or standard articles of association without taking the individual project into account can later lead to problems with the tax office if the actual management does not correspond to the nonprofit intentions of the association's own articles of association. In such cases, there may even be a risk of the nonprofit status of the association being revoked by the responsible tax office.

The articles of association should form the basis for successful and satisfactory association life. Older association statutes often no longer do justice to the increased number of members and the new tasks of the association.

For example, clear and unambiguous regulations are necessary in the context of voting processes in order to avoid disputes about the validity of resolutions within the association or with the register of associations. The majority requirements for amendments to the articles of association and changes of purpose should be lowered in line with the statutory requirements in view of the increasing number of members. Otherwise, there is a risk that necessary changes can no longer be implemented in practice, meaning that the association becomes unable to act.

In many cases, the association's articles must also be brought up to date due to developments in case law and legislation in the meantime in order to avoid disadvantages and liability risks for the association and the association's board.

Liability risks can be minimized by drafting the articles of association in a legally compliant manner. For example, regulations can be included that provide for the assignment of certain tasks to special representatives in addition to a division of responsibilities with a clear allocation of responsibilities within the management board. Although this cannot completely eliminate liability risks, it can at least reduce them to a manageable level for the management board.