What are the requirements for a club to be considered as a non-profit organization?
January 1, 2023 | 45,00 EUR | answered by Dora Krause
Dear tax consultant for club taxation and non-profit status,
I am Erika Otten and the chairperson of a non-profit organization. Recently, I have been increasingly concerned with the question of what requirements a club must meet in order to be recognized as non-profit. I have already gathered some information on this topic, but I am unsure if my club meets all the necessary requirements.
Our club is dedicated to promoting cultural events in our region and also engages in youth work. We regularly organize concerts, theater performances, and workshops for children and teenagers. We have also received donations and issued donation receipts.
My concerns lie in not knowing exactly whether our club meets all the conditions for non-profit status. I want to make sure that we do not make any mistakes and jeopardize our status as a non-profit organization.
Could you please explain to me exactly what requirements a club must meet to be recognized as non-profit? Are there specific criteria that we must adhere to? What steps should we take to ensure that we meet the requirements?
Thank you in advance for your assistance.
Sincerely,
Erika Otten
Dear Mrs. Otten,
Thank you for your inquiry regarding the requirements for recognition as a non-profit organization. It is important to be aware that the non-profit status of an organization is crucial as it comes with tax privileges and the ability to deduct donations from taxes.
In order for your organization to be recognized as non-profit, it must meet the following requirements:
1. Purpose: Your organization must pursue a charitable, benevolent, or religious purpose. In your case, this seems to be the case as you are dedicated to promoting cultural events and youth work.
2. Selflessness: The organization's activities must not be geared towards a commercial enterprise. This means that the organization's income must primarily be used for statutory purposes and not for private or commercial interests.
3. Exclusivity: The organization must use its resources exclusively for charitable purposes. This means that no profits may be made and all surpluses must benefit the organization's purpose.
4. Articles of Association: The organization's articles of association must clearly define charitable purposes. In addition, regulations on the use of funds, membership meetings, and dissolution of the organization must be included.
To ensure that your organization meets all requirements, I recommend having your articles of association reviewed by a specialist in association law. Furthermore, it is important to ensure that your accounting is properly maintained and that income and expenses are transparently documented.
If you have any further questions or need assistance, please do not hesitate to contact me.
Best regards,
Dora Krause
