Board member of an association, rules and duties

An association always has a board and members. At a minimum, the board consists of a chairman, secretary and treasurer. The members make up the general meeting of members (ALV, 'algemene ledenvergadering' in Dutch). With their voting rights, members decide on the association's actions.

Representation and liability

There are two types of associations: formal and informal. The difference is in the articles of association and the liability of the board.

Liability

An association is formal if it has established its articles of association at a notary's office and is registered in the Business Register. The board members of a formal association are not personally liable for debts. Instead, the association is liable.

An informal association is one that has not laid down its articles of association at a notary's office. The board members of an informal association are personally liable, as well as the association itself. As a board member, do you want the association to be the first liable party, and only then you? Then register the informal association in the Business Register.

Mismanagement

The board implements the association's policies. If board members do not do that, or do not do it properly, an argument or problem can arise. This is mismanagement. Think of administration that is not correct. Or if the board makes agreements on behalf of the association that the association cannot comply with. These are examples of mismanagement. The association can then hold the board or board member liable. That is true of both formal and informal associations.

Articles of association

As a board, make clear arrangements about financial matters and the way decisions are made. Put this in writing in the association's articles of association. This will minimise the risk of liability. There are also liability insurances for board members. You are then insured for the risk of personal liability after a mistake. You thus protect your private assets.

Representation

The board may enter into contracts on behalf of the association. The main rule: a contract is valid only if all board members sign it. Do you want the signature of only some of the board members to be sufficient? Then put this in the association's articles of association.

Organising a meeting of the members (ALV)

The board has to organise a general meeting of the members (ALV) at least once a year. This is an official meeting in which all board members discuss and decide upon the actions of the association. If the association has articles of association, the rules to be followed will be stated in these articles. An association without articles of association must follow the law (in Dutch). In both cases:

• The board organises the ALV.
• If the board does not want to organise the ALV, the members can do so themselves. The procedure is described in the Dutch civil code, the 'Burgerlijk Wetboek' (in Dutch).
• The articles of association state how many days in advance the invitations to the ALV must be sent. If there are no articles of association, the law dictates that there must be a 'reasonable period'. In most cases, this is at least 1week.
• The invitation to the ALV must be sent in writing. An email message also counts as a written invitation. The invitation must contain the date, place, and the agenda items the board wishes to discuss.

The role of the board during the ALV

The chairperson of the board presides over the meeting and counts the votes. Members may vote on decisions for the association. The board follows the rules on voting set out in the articles of association. For example, the minimum number of members that must be present at a vote. Are there too few members to take a decision? Then the board is obliged to organise a new ALV. The secretary of the board takes the meeting notes. These record everything discussed and decided during the meeting.

Records and annual statement

The board must keep records and financial summaries. The board makes an annual board report, a balance sheet, and a ‘statement of income and expenditure’ (‘staat van baten en lasten’, in Dutch). This must be done within 6 months of the end of the financial year. The financial year is the period covered by a financial report.

These statements list the association's income and expenses for the past year. The annual statements must be approved during the ALV. If the annual statements have been approved, the board members can 'discharge' each other. Do you receive discharge from the board? Then the board is saying that you have done your job well. As a result, the association can no longer hold you personally liable as a board member for the work you did for the association in the past year. The ALV can only take the discharge decision if it is an item on the agenda of the ALV. The board is obliged to keep the statements for 7 years.

Registration, deregistration, and new board members

If you have been appointed board member of an association in the Netherlands, you must register in the Business Register at KVK. The articles of association determine for how long a board member remains in office, the legislative term. After this term, the board must either reappoint the director, or elect a new one in their place. The arrangements for this are stated in the articles of association.

There are other reasons why a person can stop being a director:

• resignation: the director does not want to remain in office;
• dismissal: if a director does not function adequately, the other board members or the supervisory board can dismiss them; 
• The board member is no longer a member of the association;
• death.

Changing board members

Report changes in the board to the Business Register as soon as possible. When doing so, pay attention to who should sign the statement. Other changes should also happen immediately. Think of a change of address, or an update to the UBO registration. Is a new treasurer starting? Let the bank know.

Are there questions?

If you have questions about associations, contact the KVK Advice Team or read the answers to frequently asked questions.