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"It is costly wisdom that is bought by experience"
 
R. Ascham, teacher and writer (1515-1568)

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Associations cooperative associations and foundations
 
An association has a legal personality and is a form of cooperation between two or more persons (members) with a shared purpose. Generating a profit to share among the members is not a permitted purpose. The profit must benefit the shared purpose. Within an association, power is concentrated in the General Membership Meeting, which appoints the committee to manage the daily course of business. There are two forms of associations:
 
1. Association with full legal capacity
An association with full legal capacity is incorporated by a notarial deed, which includes the articles of association. This form of association must be registered with the Trade Register, otherwise each officer is jointly and severally liable. In principle, members of the management board and members of an association with full legal capacity are not liable for the obligations of the association, even after dissolution or bankruptcy.

2. Association with limited legal capacity
The articles of association of an association with limited legal capacity are not included in a notarial deed. This form of association may not be a beneficiary and may not acquire property subject to registration. The foundation officers are jointly and severally liable. An association with limited legal capacity does not have to be registered with the Trade Register, although registration does limit the committee's liability.

Cooperative association

Cooperative associations, often referred to as cooperatives, are a special type of association. Cooperatives protect the material interests of its members by entering into contracts with them. However, it is not permitted to pay out profit to the members.

Cooperative associations are legal entities and therefore liable for their own activities. In the event of dissolution, the members of the cooperative are each equally liable for the cooperative's shortfalls. However, the articles of association may limit or exclude liability borne by the members. Liability is limited for cooperatives with limited liability. Members of cooperatives with liability excluded do not have a right to recourse. The apportionment of liability may also be otherwise regulated by the articles of association.

Incorporation of associations, cooperative associations and foundations

· Associations and cooperative associations
The key regulations of an association are laid down in the articles of association. For associations incorporated by notarial deed, the following must be included in the articles of association:
· name and place of business;
· purpose;
· the members' obligations in dealings with association;
· the manner of convening the general meeting;
· the manner of appointing and resigning the members of the management board;
· the purpose of the credit balance of the association following dissolution.

A notarial deed is needed to amend the articles of association of an association incorporated by notarial deed. In addition to the articles of association, many associations also draw up specific internal regulations.

A cooperative association must be incorporated by at least two people by means of a notarial deed. The cooperation must be registered with the Trade Register as soon as possible after incorporation. All cooperations must draw up and publish annual reports and accounts each year.

Foundation

A foundation is formed in order to use capital to achieve a purpose stated in the articles of association. It may run a business and make a profit to benefit this purpose. A foundation does not have any members.

As a legal entity, foundations are independently responsible for their own rights and duties, just as a natural person. In principle, the officers of a foundation are not liable for the foundation's obligations.

A foundation is formed by one or more persons (either natural persons or legal entities) by means of a notarial deed or will. The notarial deed includes a declaration from the founders stating that the foundation has been founded, as well as the articles of association. The articles of association must state:

· the name of the foundation, which contains the word 'stichting' (foundation);
· the purpose of the foundation;
· the manner of appointing and resigning the officers;
· the municipality in the Netherlands in which the foundation is registered;
· the purpose of the surplus of the foundation after liquidation in the event of dissolution.

The articles of association usually include regulations regarding the organisation and structure of the foundation. The foundation must be registered with the Trade Register, otherwise each officer is personally liable.

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