Not only business companies need to worry about effective compliance structures. Compliance measures are also playing an increasingly important role for nonprofit organizations in Germany, i.e. charitable organizations and trade organizations. The goal of good compliance is to identify risks and rectify infringements early enough to prevent or reduce damage or loss for the organization. And, not least, good compliance serves to protect the responsible corporate bodies (boards, managing director, CEO) as it enables them, in case of doubt, to prove their proper conduct and, hence, avoid personal liability.
The benefits of good compliance are obvious: It enables the charitable organization / trade organization to present itself in the market as a respectable, transparent organization, to maintain the confidence of existing sponsors, donors, volunteers, (charitable) cooperation partners and other contractual partners and to win the confidence of new sponsors, donors, volunteers, cooperation and business partners.
In addition, good compliance enables the corporate bodies to implement efficient quality assurance, minimize liability risks faced by the nonprofit entity managed by them and their own liability risks, and strengthens the team spirit of all employees. In case of any crises of confidence or image, the charitable entity or trade organization remains able to act and can immediately take counter measures in a professional manner.
There are no binding compliance regulations for charitable organizations in Germany. Nor are there for trade organizations. However, the following key areas are typically of special relevance to nonprofit organizations:
The above list is not exhaustive. In fact, compliance is a complex issue for charitable organizations and trade organizations and involves all fields of commercial law and tax law and requires a lot of expertise and experience to be able to identify and evaluate the key issues and risks and develop an appropriate individualized model that protects the organization while avoiding excessive demands on its administrative structure.
Our experienced compliance attorneys will be pleased to assist you in taking the necessary compliance measures and adopting an appropriate compliance model for your charitable organization / trade organization in Germany.
What does that mean in specific terms?
Your organization needs support? We look forward to hearing from you at +49 (0)69 76 75 77 80 or firstname.lastname@example.org.
An individually tailored compliance structure can be of vital importance for charitable and trade organizations in Germany. If, during a fiscal audit or any other verification of the tax or nonprofit status, a documentation produced fails to meet the fiscal authorities' requirements, the consequences may involve the withdrawal of the nonprofit charitable status or the withdrawal of the tax privileges granted to a trade organization, and also a subsequent taxation and liability claims against the executive bodies (e.g. the management board). In addition, unpleasant penalties may be imposed under the act on administrative offences or under criminal law. Members of the management board and executive committee should therefore ensure a legally compliant structure of the organization they manage.
You wish to reduce liability risks within your charitable or trade organization and implement a professional risk and compliance management system? You wish to give your charity or trade organization a legally compliant structure and get yourself out of the line of fire? Our compliance experts Attorney Johannes Fein and Attorney Dr. Constantin Goette will be pleased to assist you in assessing your existing compliance structures and developing a customized compliance concept. Please feel free to contact us by e-mail (email@example.com) or by phone (+49 69 76 75 77 80).