The simplified functioning of associations is one of the most obvious advantages of the association and in particular the ability to call on volunteers. In addition, the President and administrative members may also be volunteers. Since they do not receive a salary, you will not have to pay any social security contributions.
No blocked share capital
As a reminder, the creation of the SARL or EURL requires the deposit of share capital in a banking entity. This amount will be kept there and cannot be withdrawn for some time. In the case of associations, however, this financial constraint does not exist.
Taxation free of taxes and VAT
Associations are exempt from taxes and VAT. But if their turnover exceeds a certain threshold, their taxation will be the same as that of commercial companies. This turnover is held at €76,300 for activities such as the sale of goods, the provision of accommodation, etc. As for consulting services, it amounts to €27,000.
Minimum accounting requirements
Depending on the case, an association may or may not be required to keep cash accounts. However, if it so wishes or if it has to keep it, it can be satisfied with a minimum set of accounts. In other words, it will only record receipts and disbursements without account numbers and without the need for a professional. It can also develop the chart of accounts, and this, only according to its needs. Not to mention that an association does not have to publish its accounts annually.
Aid to associations
Several aids are available to associations to help them finance or develop. There are state aids such as the DLA (Local Accompaniment Scheme). This is a free aid that supports structures in difficulty or in development. In addition, it is possible to see some foundations that provide financial support to associations. Examples include the Engie Foundation, the Alliance Foundation, the Auchan Foundation for Youth, etc.
The association of companies: advantages and disadvantages
An advantageous status, which becomes less so as soon as the association grows.
The associative formula has clear advantages.
The association makes it possible to pool resources without requiring initial capital (unlike the SARL, where a minimum of 50,000 francs is required), and with very simplified incorporation formalities.
If the association is non-profit-making, it is not subject to commercial taxes (VAT, corporate taxes, business tax, etc.). However, if the people who work there are not volunteers, it is taxable as a payroll tax.
The associative status also exempts from the publication of accounts and allows subsidies to be received if it is an association of general interest (as is the case with Maaform). But beware, the non-profit association status is complex and can be ephemeral.
The non-profit association presupposes a disinterested management. The president and directors must not be employees; excess revenues cannot be shared. In addition, the association is not allowed to advertise.
As soon as the association carries out a competitive activity for a company, or evolves towards a commercial activity (whether it is managed with objectives and methods that assimilate it to a commercial enterprise), it loses all tax exemption.
Under these conditions, the association becomes profit-making and loses all tax interest.
It no longer provides any special protection in relation to companies. It then has disadvantages, linked to poorly detailed statutes and a rather vague functioning.
For internal financial solidarity, repayments are not governed by the statutes, as the members of the association are not legally liable for its debts. It is then in the association’s interest to evolve towards other statutes.
The EIG (economic interest grouping) makes it possible to pool resources and pursue a commercial activity. But be careful, the EIG must have a very specific vocation. This legal form is relevant if its members work in the same field of activity. In addition, the members are jointly and severally liable for the group’s debts and the EIG cannot make any profits.
The SA or SARL. In such companies, the capital is divided into shares and the shareholders only bear the losses up to the amount of their contributions. Unlike the EIG, the company makes a profit for itself.
Why create an association?
The main advantage of creating an association is that it is governed by the 1901 law. This law gives a group of individuals, of at least two people, the possibility to associate without any prior authorization. In addition, other advantages are added to this facility, such as the speed of the procedure, the derogation from social security contributions and the minimum accounting, among others. Overview.