Not fulfilling its annual obligations might cause serious consequences for a (international) not-for-profit association: enforced closing of bank accounts or even judicial dissolution.
Just like any company, every Belgian not-for-profit association has to meet a number of annual legal obligations. An overview.
1. Annual accounts
The Board of Directors is obliged to draw up an inventory and annual accounts every year.
The annual accounts consist of the balance sheet, the profit and loss account and the explanatory notes. Based on size criteria, not-for-profit associations can be divided into large, small and micro associations and foundations. The size (large, small or micro) determines which model of annual accounts should be used. Large not-for-profit associations must use the so-called full model for non-profit associations, small not-for-profit associations can use the simplified model and micro not-for-profit associations can use the micro model for non-profit associations.
The annual accounts have to be filed yearly at the Belgian National Bank. Small or micro not-for-profit associations can also opt for simplified accounting allowing them to use a simplified model of annual accounts. In such case, they must file their annual accounts with the Companies Court.
The annual accounts have to be approved by the Annual Meeting within 6 months after closing of the financial year.
Each year, the Board of Directors has to prepare a budget for the following financial year.
The budget must be approved at the annual meeting.
3. Annual meeting – general assembly of members
At least once a year an annual meeting has to be organised within 6 months after closing of the financial year. At the annual meeting the shareholders must decide on the approval of the annual accounts.
Typical points on the agenda of the annual meeting are:
– Decision on the approval the annual accounts;
– Decision on the granting of discharge to the directors (and statutory auditor, if a statutory auditor is appointed);
– As the case may be: appointment and dismissal directors or renewal of their mandates.
Some of the decisions taken at the annual meeting, such as the dismissal and appointment of directors, have to be published in the Belgian State Gazette.
Due to the COVID-19 crisis, new legislation has made it possible to hold the annual meeting by videoconference, even if this possibility is not provided by the articles of association. An annual meeting by videoconference has to meet certain criteria in order to be valid.
4. Tax returns
Each (international) not-for-profit association has to file tax returns:
– Yearly, a tax return for the legal entities tax must be filed;
– VAT returns, if applicable must be filed yearly, quarterly or monthly depending upon the VAT regime opted for.
In addition to the yearly tax return, specific filings must be made in connection to specific payments (e.g. payments of salaries, payments of dividends, payments of commissions or fees to service providers, etc.).
Every (international) not-for-profit association has to register its Ultimate Beneficiary Owners (UBOs) in the Belgian UBO Register.
The following persons are considered as UBOs:
1. The directors;
2. The persons entitled to represent the (international) not-for-profit association;
3. The persons in charge of the daily management of the (international) not-for-profit association;
4. The natural persons or, when those persons have yet to be determined, the class of persons in whose main interest the (international) not-for-profit association is set up or operates;
5. Any other natural person exercising ultimate control over the (international) not-for-profit association by other means.
The UBOs have to be confirmed yearly as well.
If you need more information or assistance on this matter,
MVVP is happy to assist (international) not-for-profit organisations.