DO YOU WANT TO FOUND AN ASSOCIATION?
Cultural associations are usually non-profit associations. A non-profit association is an organisation, meant to be permanent, founded by several persons or several organisations having legal capacity, for the realisation of a common non-profit purpose. Non-profit associations differ from economic organisations in that they do not aim at gaining profit or economic benefit for the parties to them, and that their activities cannot be mainly economic. The focus of the activities has to be in non-profit work. Besides cultural associations also political parties, trade unions, athletic clubs, charitable organisations and hobby clubs are examples of non-profit associations.
Why an association?
Freedom of association is one of the basic political rights guaranteed in the Finnish Constitution. In Finland, the freedom of association is understood as a universal right, which is why it applies in principle to all forms of association activities alike.
Freedom of association means, among other things, the right to form an association without a permit and to be a member of one or more associations. Freedom of association also means the right not to join any association and the right to resign, whenever you wish, from an association which you have joined. Associations, on the other hand, are in Finland deemed to enjoy the internal freedom of activity, which means that they have the right to independently draft their rules (bylaws), within the framework of law, and decide on their internal operations.
In Finnish society, association activities, and registered associations, in particular, play a very central role. Associations extend their operations to all sectors of life. Registered non-profit associations cover such spheres as a trade union and party-political activities, as well as cultural fields, leisure activities and social and health affairs, among other things. It is estimated that more than 90% of all associations are engaged in an important social activity. Many Finns and people resident in Finland belong to more than one association during their lives.
Can a foreigner form an association?
In Finland, the freedom of association also covers foreign natural persons and foreign organisations having legal capacity. Consequently, foreigners may in Finland found associations, join them and act in them, also as members of the Executive Committee, and be entitled to sign the name of the association. The only restriction is laid down by Section 35(3) of the Association Act, according to which the chairperson has to be a resident of Finland. This restriction also applies to the vice-chairperson. The Finnish Patent and Registration Office may grant an exemption from this restriction. See the instruction on how to draw up a petition.
What kind of associations there are?
A non-profit association can operate either as a registered or an unregistered association.
Registered associations have legal capacity. They can own property, enter into contracts and file different petitions and applications, if necessary. Members of a registered association are not personally liable for the commitments of the association.
An unregistered association does not have legal capacity, it cannot acquire property in its name and be a member of another association. It’s establishment and operations are free in form and the Executive Committee cannot act on behalf of the association in a way that is binding on the rest of the members. Responsibility for the operations of an unregistered association is borne by the members who have participated in the operations from which the responsibility arises.
How to found an association?
A registered association may be founded by a minimum of three natural persons of at least 15 years of age or organisations having legal capacity. The founders may also consist of both of these. Foreigners can also act as founders. The persons signing the charter must be members of the association entitled to vote; natural persons or organisations having legal capacity.
The easiest way to form a new association is to go to the website of Finnish Patent and Register Office you can find information and active links to all forms needed. (https://www.prh.fi/en/yhdistysrekisteri/perustaminen.html) where
The required forms, rule models etc (in Finnish) you find here: https://www.prh.fi/fi/yhdistysrekisteri/lomakkeet_mallisaannot.html
The association has to fill in the basic notice forms, the charter and the rules in one copy and submit the documents either directly to the Register of Associations or to a Local Register Office (maistraatti).
Please note that the notice forms may only be filed in Finnish or Swedish.
The procedure for founding an association:
- Visit the website of Finnish Patent and Register Office to find all advise you need: https://www.prh.fi/en/yhdistysrekisteri/perustaminen.html)
- Gather minimum three persons/organizations with legal capacity
- Organize association´s founding meeting where you:
* define together the meaning, goals and actions for your association
* select the board (chairperson, vice-chairperson, treasurer, secretary, other members).
Please remember to write meeting´s minutes and to have it signed and confirmed.
- Write and sign association´s founding charter using the model (perustamiskirja) you find in: https://www.prh.fi/fi/yhdistysrekisteri/lomakkeet_mallisaannot.html
- Start your association´s registration proces by filling the electronical form: https://yhdistysilmoitus.prh.fi/etusivu.htx?kieli=3
- Registration process lasts 1-2 weeks and you can follow it in web: https://yhdistysilmoitus.prh.fi/nimihaku.htx?kieli=3
- Your association is registred when the Office sends you a six digits registration code (rekisterinumero).
The next step for your association may be to apply for a Business ID (y-tunnus)
What is it?
A Business Identity Code (Business ID) is given to associations or other organisations when they are entered in the Business Information System (ytj.fi), jointly maintained by the Finnish Patent and Registration Office (PRH) and the Finnish Tax Administration. The Business ID consists of seven digits, a dash and a control mark, for example 1234567-8.
The Business ID does not show whether an association is registered. That has to be checked separately in our AssociationNet information service. The Business ID does not replace the registration number and does not make the association an association with legal capacity.
When does an association need a Business ID?
An association needs a Business ID when it engages in activities which it has to report to the registers kept by the Tax Administration.
Those activities are, for example
- employer activities (notifications to the Employer Register or Prepayment Register maintained by the Tax Administration), or
- activities liable to value-added tax (notifications to the VAT Register maintained by the Tax Administration).
Please note: An association does not need a Business ID to open a bank account.
How to apply for a Business ID?
To apply Business ID (y-tunnus) for your association you have to fill in Y1 form that you will find with advice here: https://www.ytj.fi/en/index/notifications/start-upnotifications/association.html
Text sources: www.prh.fi, www.ytj.fi