Founding an association in Switzerland: how does it work?

Founding an association in Switzerland is the first step for many initiatives to achieve social impact. The legal form of an association offers uncomplicated access to this. However, anyone wishing to set up an association should be familiar with the legal framework.

The association system is deeply rooted in Switzerland. Since the 19th century, people in this country have come together voluntarily to pursue common ideological goals: from sport and culture to social concerns and political engagement. Today, the number of associations is estimated at around 80,000 to 100,000. This high density is no coincidence. The constitutionally guaranteed freedom of association and the extensive autonomy of associations make it possible to establish and flexibly organize an association without a great deal of bureaucracy.

Founding an association in Switzerland is therefore easier than many people think. Especially for charitable projects, the legal form of an association offers a flexible and legally secure way to make an impact. However, anyone wishing to set up an association should know what requirements apply and how non-profit associations differ from other forms of association.

Why set up an association in Switzerland at all?

Founding an association means transferring common goals into a legally recognized structure. The association creates reliability, both internally for those involved and externally for partners, funding bodies or authorities. In Switzerland, the association is therefore one of the most frequently chosen forms of organization for joint, non-profit activities.

These are the advantages of founding an association in Switzerland:

–Legal independence: The association is a separate legal entity and can conclude contracts, open accounts or enter into obligations.
– Limited liability: As a rule, only the association’s assets are liable, not the members’ private assets.
– Clear participation: Members can have an active say through the general meeting and influence the direction of the association.
– Long-term capacity to act: Projects are not tied to individual persons, but are institutionally secured.
– Funding options: Associations can levy membership fees, collect donations and apply for funding.

To set up a non-profit association or not?

A wide variety of associations can be founded in Switzerland – such as sports, leisure, interest or professional associations. There are also associations that pursue charitable purposes. Non-profit associations do not focus their activities on the interests of their members, but on the common good. Typical areas are social support, culture, education, the environment or development cooperation.

A key difference concerns tax exemption: only non-profit associations can apply to the cantonal tax authorities for exemption from profit and capital tax.

The requirements for a non-profit association are

– a selfless, idealistic purpose of the association,
– no distribution of profits to members,
– an actual activity in the sense of the charitable purpose and
– associations that primarily serve the interests of their members (e.g. classic sports or hobby clubs) do not generally meet these requirements.

What are the requirements for founding an association in Switzerland?

Founding an association in Switzerland is regulated by low-threshold legislation. Nevertheless, a few basic points should be clarified in advance:

– At least two founding members
– No required start-up capital
– A clearly defined, idealistic purpose of the association
– Written articles of association
– Holding a founding meeting
– Proper bookkeeping and annual accounts

The founding members do not have to be Swiss citizens or resident in Switzerland. Minors can also be involved, but must be represented by an adult for legally binding decisions.

The purpose of the association is also key. It must be of an ideal nature, i.e. not primarily geared towards economic gain. An association may be supported by economic activities as long as these serve the purpose and do not lead to self-enrichment. It is also important to think about the financing of the association at an early stage, for example through membership fees, donations or grants.

The legal basis of the association

The legal basis for associations in Switzerland is the Swiss Civil Code (Art. 60 ff. ZGB). Once the articles of association have been adopted at the founding meeting, the association becomes a legal entity and is therefore legally independent. The supreme body of the association is the general meeting. It decides on fundamental issues, elects the Board of Directors and approves the annual accounts and budget, among other things. The Executive Board manages the day-to-day business and represents the association externally.

The written articles of association are mandatory. They regulate:

– the purpose of the association
– the organization and the association bodies
– the responsibilities and decision-making processes
– the financial resources (e.g. membership fees)

An entry in the commercial register is only necessary if the association operates a commercial business or is subject to auditing. For many non-profit associations, entry in the commercial register is therefore voluntary.

Founding an association step by step

The formal founding process is straightforward and can be planned well. Careful preparation makes the process easier in any case. Follow these steps to found an association:

1. define the purpose of the association and draw up the articles of association:
Clarify the purpose, organization and financing of the association in writing.

2. determine the name of the association:
The name of the association is freely selectable, but must not be misleading and must be clearly distinguishable from existing association names.

3. determine founding members:
At least two people must support the foundation.

4. hold the founding meeting:
Adopt the articles of association, elect the board, draw up the founding minutes.

5. open an association bank account:
For a clean separation of association and private assets.

6. set up organization:
Accounting, data protection, clarify internal processes and responsibilities.

7. apply for tax exemption (optional):
Non-profit associations can submit an application to the cantonal tax authority, which the cantonal tax authority will decide on after examination.

8. check commercial register entry (optional):
Only required for commercial business or mandatory auditing.

Costs and obligations after the association is founded

Founding an association in Switzerland is generally free of charge. Costs are mainly incurred in ongoing operations, for example for accounting, insurance, digital infrastructure (i.e. website or software) as well as for communication and public relations.

Irrespective of any tax exemption, the Executive Board is obliged to keep proper accounts and prepare annual financial statements. These provide information on the association’s income, expenditure, assets and debts. Larger or economically active associations may also be subject to auditing. This means that their annual accounts are audited by an independent body. Even without a legal obligation, such an audit can be useful in order to create transparency and strengthen the trust of donors, funding bodies or public authorities.