De facto association (feitelijke vereniging)

If you form a dance group, school or company with other people, then you have formed an association. A de facto organisation (or “feitelijke vereniging” in Dutch) is created automatically as soon as you organise something with other people.

Few obligations

The name says it all: you are an organisation ‘in fact’. You have a de facto association if you organise a street party with your neighbours, for example, but also if you just start offering dance lessons with a few teachers or rehearse weekly with your dance company.

As a de facto association you have few obligations. You don’t need to draw up articles of association, hold general meetings, appoint a board, deposit annual accounts, etc, so a de facto association doesn’t need much administration.

Little protection

In legal language we say that a de facto association is not a legal entity (rechtspersoonlijkheid). Legally, a de facto association is not a separate entity with its own rights and obligations. The de facto association is the people of which it consists.

You cannot enter into a contract with a de facto association as an organisation, only with the people who are members of it. If, for example, you take out a lease, you have to do that in your own name on behalf of the association.

The people who are part of the de facto association are then personally liable (aansprakelijk) for any mistakes or damage or loss related to the association. If you rent a refrigerator for the street party, for example, and the invoice isn’t paid, then you as a member of the de facto association are personally responsible for making sure that it is paid. If a mistake is made in the group with serious financial or human costs (fraud, a fire or an accident, etc.), the association will not be responsible but the people who are members of it.

Make good agreements

If you have a de facto association, then you don’t have to draw up articles of association. Nevertheless, we advise you to come to good agreements with your fellow organisers and to put those agreements down on paper.

How should you deal with money? How do you make decisions together? Who can make decisions and who can be involved in that decision-making? Who can be a member of the association and who cannot?

Insurance

Insurance is also indispensable, even for a de facto association.

As a de facto association you can take out a discounted insurance for civil liability and physical accidents via Danspunt.

Bookkeeping and administration

You don’t have to maintain any complicated bookkeeping, but make sure that your administration is correct and transparent. Keep a clear list of all income and outgoings.

Never give money to any of the members of the association without the correct paperwork (see the part about paying and getting paid).

To avoid arguments, make sure that the de facto association’s money is kept separate. Keep a separate cash box or open a bank account in the name of the association.

Summary

If your plans are modest and the risk is limited, and you do what you are doing with people you trust, then a de facto association is a good way of organising yourselves. Do it carefully, though, and take the tips above into account to avoid problems or arguments.

Always remember that you are personally liable as a director or trustee if something goes wrong.

As soon as you begin to make more ambitious plans involving more money or risk, then becoming an entity such as a legally constituted non-profit organisation (vzw) is advisable. You are protected better personally and you have a more legally solid structure. Here you can read why a vzw can be a better idea.