How can a club adjust its statutes to become non-profit?
October 20, 2023 | 50,00 EUR | answered by Björn Ley
Dear Tax Advisor,
I am Wilhelm Meier and the chairman of a sports club in my community. Our club has been active for many years and is dedicated to promoting sports for children and teenagers, especially in the area of recreational sports. We mainly finance ourselves through membership fees and donations, as we have not yet been recognized as a non-profit organization. Now I would like to achieve non-profit status for our club in order to enjoy tax benefits and be able to issue donation receipts.
Our articles of association were written several years ago and do not meet the current requirements for non-profit organizations. We have already done some research and know that it is necessary to adjust the articles of association accordingly in order to obtain non-profit status. However, we are unsure about the exact steps we need to take and what specific points need to be changed in the articles of association.
My concern is that we might make mistakes in adjusting the articles of association and jeopardize our recognition as a non-profit organization. That is why I am reaching out to you to get professional support and advice. Can you help us adjust the articles of association of our club so that we can achieve non-profit status? What specific steps do we need to take and what should we pay special attention to?
Thank you in advance for your help.
Sincerely,
Wilhelm Meier
Dear Mr. Meier,
Thank you for your inquiry and your interest in obtaining recognition of tax-exempt status for your sports club. I understand your concerns and would like to assist you in ensuring that the adaptation of your articles of association is successful.
First and foremost, it is important to know that the recognition of tax-exempt status for your club is granted by the tax office. The tax office examines whether your club's articles of association meet the requirements of a tax-exempt organization. A tax-exempt organization exclusively and directly pursues charitable purposes, such as the promotion of sports and youth development.
In order to obtain recognition as a tax-exempt club, you need to adjust your articles of association accordingly. In doing so, you should pay particular attention to the following points:
1. Charitable Purpose: Ensure that your articles of association clearly and unambiguously specify the charitable purpose your club pursues. This could be, for example, the promotion of sports, youth welfare, or education.
2. Selflessness: Your articles of association should ensure that the club's resources are used exclusively and directly for charitable purposes. There should be no self-dealing or enrichment of individual members.
3. Prohibition of Favoritism: Your articles of association should also include a prohibition of favoritism towards certain individuals. This means that members or third parties must not be unduly favored.
4. Dissolution Clause: It is important that your articles of association include a dissolution clause that specifies what will happen to the club's assets in the event of dissolution. These assets must also be dedicated to charitable purposes.
To adjust your articles of association accordingly, I recommend seeking the advice of a lawyer or tax advisor specializing in association law. They can assist you in revising your articles of association and ensure that all necessary points are taken into consideration.
I am also available to assist you in this process and provide you with further information. Please do not hesitate to contact me if you have any further questions or need assistance.
Sincerely,
Björn Ley, Tax Advisor
